(a)
The
Answer to Problem 10P
The depreciation schedule using MACRS is shown below.
Year |
Depreciation |
Total |
Explanation of Solution
Given:
Cost of the small motorboat is
Time period is
Concept used:
Write the expression to calculate the depreciation value for the motorboat.
Here, the depreciation value is
Calculation:
The given asset comes under MACRS “automobiles and trucks” designation. Thus it is considered as a 5 year property with ADR of 5 years. Using MACRS GDS 5 year property table calculate the depreciation for the motorboat.
Calculate the depreciation for motorboat.
Substitute,
Calculate the depreciation for 5 years and enter them in a table below.
Year |
MACRS |
Cost |
Depreciation |
Total |
Conclusion:
The depreciation schedule using MACRS is shown below.
Year |
Depreciation |
Total |
(b)
The depreciation schedule using SOYD method.
Answer to Problem 10P
The depreciation schedule using SOYD is shown below.
Year |
Depreciation |
Total |
Explanation of Solution
Given:
Cost of the small motorboat is
Time period is
Salvage value is
Concept used:
SOYD is known as sum of year’s digits depreciation.
Write the expression to calculate the depreciation of the motorboat.
Here, the depreciation value is
Calculation:
Calculate the depreciation using SOYD for the motorboat.
Substitute,
Calculate the depreciation value for 5 years.
Year |
Depreciation |
Total |
Here, calculate the depreciation from Equation (III).
Conclusion:
The depreciation schedule using SOYD is shown below.
Year |
Depreciation |
Total |
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Chapter 11 Solutions
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