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Concept explainers
Introduction: The value of an asset decreases over a period of time due to wear and tear. This reduction in the value of asset is termed as
Given:
- A machine was purchased for $90,000.
- The machine has salvage value of $6,000 and useful life of 5 years.
- The machine can operate for 100,000 hours.
The machine as follows:
20,000 hours in 2015; 25,000 hours in 2016; 15,000 hours in 2017; 30,000 hours in 2018; 10,000 hours in 2019.
(a) To compute: The annual depreciation under each of the following depreciation methods.
(1) Straight-line method.
(2) Activity method.
(3) Sum-of-the-years’-digits method.
(4) Double-declining-balance method.
(b) To compute: The annual depreciation expenses over the life of the asset applying the following methods. (Assume a fiscal year-end of September 30.)
(1) Straight-line method.
(2) Sum-of-the-years’-digits method.
(3) Double-declining-balance method.
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Chapter 11 Solutions
Intermediate Accounting, Binder Ready Version
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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