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 depreciation. Given: Depreciation schedules as per 3 different methods are provided below: Year Straight-Line Sum-of-the-Years’-Digits Double-Declining-Balance 1 $9,000 $15,000 $20,000 2 $9,000 $12,000 $12,000 3 $9,000 $9,000 $7,200 4 $9,000 $6,000 $4,320 5 $9,000 $3,000 $1,480 Total $45,000 $45,000 $45,000 (a) To determine the cost of the asset that has been depreciated .

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Answer 1

Question

Chapter 11, Problem 2E

To determine

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 depreciation.

Given: Depreciation schedules as per 3 different methods are provided below:

Year

Straight-Line

Sum-of-the-Years’-Digits

Double-Declining-Balance

1

$9,000

$15,000

$20,000

2

$9,000

$12,000

$12,000

3

$9,000

$9,000

$7,200

4

$9,000

$6,000

$4,320

5

$9,000

$3,000

$1,480

Total

$45,000

$45,000

$45,000

(a)

To determine the cost of the asset that has been depreciated.

To determine

(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

To determine

(c)

To determine which method will result in highest charge to the net income in the first year?

To determine

(d)

To determine the method which will produce highest charge to the income in the fourth year?

To determine

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

To determine

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

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Answer 2

Question

Chapter 11, Problem 2E

To determine

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 depreciation.

Given: Depreciation schedules as per 3 different methods are provided below:

Year

Straight-Line

Sum-of-the-Years’-Digits

Double-Declining-Balance

1

$9,000

$15,000

$20,000

2

$9,000

$12,000

$12,000

3

$9,000

$9,000

$7,200

4

$9,000

$6,000

$4,320

5

$9,000

$3,000

$1,480

Total

$45,000

$45,000

$45,000

(a)

To determine the cost of the asset that has been depreciated.

To determine

(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

To determine

(c)

To determine which method will result in highest charge to the net income in the first year?

To determine

(d)

To determine the method which will produce highest charge to the income in the fourth year?

To determine

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

To determine

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

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Answer 3

Question

Chapter 11, Problem 2E

To determine

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 depreciation.

Given: Depreciation schedules as per 3 different methods are provided below:

Year

Straight-Line

Sum-of-the-Years’-Digits

Double-Declining-Balance

1

$9,000

$15,000

$20,000

2

$9,000

$12,000

$12,000

3

$9,000

$9,000

$7,200

4

$9,000

$6,000

$4,320

5

$9,000

$3,000

$1,480

Total

$45,000

$45,000

$45,000

(a)

To determine the cost of the asset that has been depreciated.

To determine

(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

To determine

(c)

To determine which method will result in highest charge to the net income in the first year?

To determine

(d)

To determine the method which will produce highest charge to the income in the fourth year?

To determine

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

To determine

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

Expert Solution & Answer

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Answer 4

Question

Chapter 11, Problem 2E

To determine

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 depreciation.

Given: Depreciation schedules as per 3 different methods are provided below:

Year

Straight-Line

Sum-of-the-Years’-Digits

Double-Declining-Balance

1

$9,000

$15,000

$20,000

2

$9,000

$12,000

$12,000

3

$9,000

$9,000

$7,200

4

$9,000

$6,000

$4,320

5

$9,000

$3,000

$1,480

Total

$45,000

$45,000

$45,000

(a)

To determine the cost of the asset that has been depreciated.

To determine

(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

To determine

(c)

To determine which method will result in highest charge to the net income in the first year?

To determine

(d)

To determine the method which will produce highest charge to the income in the fourth year?

To determine

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

To determine

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

Expert Solution & Answer

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See solution

Answer 5

Chapter 11, Problem 2E

To determine

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 depreciation.

Given: Depreciation schedules as per 3 different methods are provided below:

Year

Straight-Line

Sum-of-the-Years’-Digits

Double-Declining-Balance

1

$9,000

$15,000

$20,000

2

$9,000

$12,000

$12,000

3

$9,000

$9,000

$7,200

4

$9,000

$6,000

$4,320

5

$9,000

$3,000

$1,480

Total

$45,000

$45,000

$45,000

(a)

To determine the cost of the asset that has been depreciated.

To determine

(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

To determine

(c)

To determine which method will result in highest charge to the net income in the first year?

To determine

(d)

To determine the method which will produce highest charge to the income in the fourth year?

To determine

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

To determine

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

Answer 6

Chapter 11, Problem 2E

To determine

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 depreciation.

Given: Depreciation schedules as per 3 different methods are provided below:

Year

Straight-Line

Sum-of-the-Years’-Digits

Double-Declining-Balance

1

$9,000

$15,000

$20,000

2

$9,000

$12,000

$12,000

3

$9,000

$9,000

$7,200

4

$9,000

$6,000

$4,320

5

$9,000

$3,000

$1,480

Total

$45,000

$45,000

$45,000

(a)

To determine the cost of the asset that has been depreciated.

Answer 7

Chapter 11, Problem 2E

To determine

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 depreciation.

Given: Depreciation schedules as per 3 different methods are provided below:

Year

Straight-Line

Sum-of-the-Years’-Digits

Double-Declining-Balance

1

$9,000

$15,000

$20,000

2

$9,000

$12,000

$12,000

3

$9,000

$9,000

$7,200

4

$9,000

$6,000

$4,320

5

$9,000

$3,000

$1,480

Total

$45,000

$45,000

$45,000

(a)

To determine the cost of the asset that has been depreciated.

Answer 8

To determine

(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

Answer 9

To determine

(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

Answer 10

To determine

(c)

To determine which method will result in highest charge to the net income in the first year?

Answer 11

To determine

(c)

To determine which method will result in highest charge to the net income in the first year?

Answer 12

To determine

(d)

To determine the method which will produce highest charge to the income in the fourth year?

Answer 13

To determine

(d)

To determine the method which will produce highest charge to the income in the fourth year?

Answer 14

To determine

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

Answer 15

To determine

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

Answer 16

To determine

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

Answer 17

To determine

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

Answer 18

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Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

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(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

(c)

To determine which method will result in highest charge to the net income in the first year?

(d)

To determine the method which will produce highest charge to the income in the fourth year?

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

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Chapter 11 Solutions

Year	Straight-Line	Sum-of-the-Years’-Digits	Double-Declining-Balance
1	$9,000	$15,000	$20,000
2	$9,000	$12,000	$12,000
3	$9,000	$9,000	$7,200
4	$9,000	$6,000	$4,320
5	$9,000	$3,000	$1,480
Total	$45,000	$45,000	$45,000

Concept explainers

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(b) To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

(c) To determine which method will result in highest charge to the net income in the first year?

(d) To determine the method which will produce highest charge to the income in the fourth year?

(e) To determine which method will produce the highest book value for the asset at the end of Year 3?

(f) To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?

Want to see the full answer?

Chapter 11 Solutions

(b)

To determine the amount of salvage value, if any, used in the depreciation calculations for this asset.

(c)

To determine which method will result in highest charge to the net income in the first year?

(d)

To determine the method which will produce highest charge to the income in the fourth year?

(e)

To determine which method will produce the highest book value for the asset at the end of Year 3?

(f)

To determine if the asset is sold at the end of the third year, which depreciation method will yield the highest gain (or lowest loss) on the disposal of the asset?