X Answer is complete but not entirely correct. CHEETAH СOРY Depreciation Schedule-Double-Declining-Balance End of Year Amounts Depreciation Expense 2$ Accumulated Year Book Value Depreciation 1 41,250 X $ 20,625 X $ 68,750 X 34,375 X 41,250 X 61,875 X 2 34,375 6,875 X 27,500 4 82,500 27,500 Total $ 82,500 3.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Required information
Problem 7-5B Determine depreciation under three methods (LO7-4)
[The following information applies to the questions displayed below.]
Cheetah Copy purchased a new copy machine. The new machine cost $110,000 including installation. The company
estimates the equipment will have a residual value of $27,500. Cheetah Copy also estimates it will use the machine for
four years or about 8,000 total hours. Actual use per year was as follows:
Hours Used
2,000
1,600
2,000
3,200
Year
1
2
4
Problem 7-5B Part 2
2. Prepare a depreciation schedule for four years using the double-declining-balance method. (Hint: The asset will be depreciated in
only two years.) (Do not round your intermediate calculations.)
X Answer is complete but not entirely correct.
CHEETAΗ COPY
Depreciation Schedule-Double-Declining-Balance
End of Year Amounts
Depreciation
Accumulated
Year
Вook Value
Danreaintion
Evnanse](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15a526c6-de52-4025-8530-5e7aa950042d%2Fb721a970-c0b8-4611-8e46-071037f38c67%2Fyg8pfkqt_processed.png&w=3840&q=75)
solution
given
|
Cost of machine |
$110000 |
|
Residual value |
27500 |
|
Useful life |
4 years |
Working note :
Double declining balance depreciation rate
=1/ useful life * 2
=1/4 *2
=50%
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