Respuesta :
Answer:
Year //dep expense //ac dep //book value
- $110,000.00
1 $14,285.71 $14,285.71 $95,714.29
2 $14,285.71 $28,571.43 $81,428.57
3 $14,285.71 $42,857.14 $67,142.86
4 $14,285.71 $57,142.86 $52,857.14
5 $14,285.71 $71,428.57 $38,571.43
6 $14,285.71 $85,714.29 $24,285.71
7 $14,285.71 $100,000.00 $10,000.00
SUM OF YEARS
Year //factor// dep expense //ac dep //book value
- $110,000.00
1 0.25 $25,000.00 $25,000.00 $85,000.00
2 0.21 $21,428.57 $46,428.57 $63,571.43
3 0.18 $17,857.14 $64,285.71 $45,714.29
4 0.14 $14,285.71 $78,571.43 $31,428.57
5 0.11 $10,714.29 $89,285.71 $20,714.29
6 0.07 $7,142.86 $96,428.57 $13,571.43
7 0.04 $3,571.43 $100,000.00 $10,000.00
200% double declining:
[tex]\left[\begin{array}{ccccc}Year&Beginning&Dep-Expense&Acc. \: Dep&Ending\\0&-&-&-&110000\\1&110000&31428.57&31428.57&78571.43\\2&78571.43&22448.98&53877.55&56122.45\\3&56122.45&16034.99&69912.54&40087.46\\4&40087.46&11453.56&81366.1&28633.9\\5&28633.9&8181.11&89547.21&20452.79\\6&20452.79&5843.65&95390.86&14609.14\\7&14609.14&4609.14&100000&10000\\\end{array}\right][/tex]
150% accelerated depreaciation:
[tex]\left[\begin{array}{cccccc}Year&Beginning&Dep-Expense&Acc. \: Dep&Ending\\0&-&-&-&110000\\1&110000&23571.43&23571.43&86428.57\\2&86428.57&18520.41&42091.84&67908.16\\3&67908.16&14551.75&56643.59&53356.41\\4&53356.41&11433.52&68077.11&41922.89\\5&41922.89&8983.48&77060.59&32939.41\\6&32939.41&7058.45&84119.04&25880.96\\7&25880.96&15880.96&100000&10000\\\end{array}\right][/tex]
Explanation:
Straight Line:
Acquisition Value 110,000
Salvage Value 10,000
ammount subject to depreciation 100000
Useful Life 7
depreciation per year:
depreciable amount divided by useful life 14285.71
This amount is repeatead throughout the life of the equipment.
SUM OF YEARS FACTORS:
sum of year: 7*8/2 = 28
remaining years over sum of year
1st 7/28
2nd 6/28
3rd 5/28
4th 4/28
5th 3/28
6th 2/28
7th 1/28
Double declining 200%
we have to multiply 1/useful life by the double declining facot
in this case as it is 200% it will be 2.
threfore the carrying vlue is multiplied by 2/7 each year to determinatethe depreciation expense
declining 150%
here we multiply by 1.5 resulting in a factor of 3/14 to obtain the depreciation expense
Answer:
Depreciation schedule using Straight Line Method
Straight Sum of 200 % declining 150 % declining
Line the years balance balance
Method Method Method Method
Year 1 $ 14,285 $ 25,000 $ 31,427 $ 23,570
Year 2 $ 14,285 $ 21,429 $ 22,448 $ 18,520
Year 3 $ 14,285 $ 17,857 $ 16,035 $ 14,551
Year 4 $ 14,285 $ 14,286 $ 11,454 $ 11,433
Year 5 $ 14,285 $ 10,714 $ 8,181 $ 8,984
Year 6 $ 14,285 $ 7,143 $ 5,844 $ 7,059
Year 7 $ 14,285 $ 3,571` $ 4,174 $ 5,546
Explanation:
Computation of Depreciation under the straight Line Method
Cost of equipment $ 110,000
Salvage Value $( 10,000)
Depreciable Basis $ 100,000
Estimated Useful Life 7 years
Depreciation % per year 14.285%
Depreciation per year for each year $ 14,285
Computation of Depreciation under the Sum of the years method
In a sum of the years balance method the no of years recovery life is added together as a denominator and the first year the highest depreciation is charged. The salvage value is considered and the depreciable basis is the same as the Straight Line Method
Sum of the years ( 7 + 6 + 5 + 4 + 3 + 2 + 1) = 28
Depreciable basis $ 100,000
Depreciation Year 1 7/28 * $ 100,000 $ 25,000
Depreciation Year 2 6/28 * $ 100,000 $ 21,429
Depreciation Year 3 5/28 * $ 100,000 $ 17,857
Depreciation Year 4 4/28 * $ 100,000 $ 14,286
Depreciation Year 5 3/28 * $ 100,000 $ 10,714
Depreciation Year 6 2/28 * $ 100,000 $ 7,143
Depreciation Year 6 1/28 * $ 100,000 $ 3,571
Computation of Depreciation under 200 % declining balance method
In a declining balance method the salvage value is not considered and the depreciation is applied on a declining balance on double the straight line method depreciation %
Depreciable Basis - same as cost $ 110,000
Depreciation Rate - 14.285 % * 2 = 28,57 %
Depreciation for Year 1 - $ 110,000 * 28.57 % = $ 31,427
Depreciation Basis for Year 2 $ 78,573
Depreciation for Year 2 - $ 78,573 * 28.57 % = $ 22,448
Depreciation Basis for Year 3 $ 56, 125
Depreciation for Year 3 - $ 56,125 * 28.57 % $ 16,035
Depreciation Basis for Year 4 $ 40,090
Depreciation for Year 4 - $ 40,090 * 28.57 % $ 11,454
Depreciation Basis for Year 5 $ 28,636
Depreciation for Year 5 - $ 28,636 * 28.57 % $ 8,181
Depreciation Basis for Year 6 $ 20,455
Depreciation for Year 6 - $ 20,455 * 28.57 % $ 5,844
Depreciation Basis for Year 7 $ 14,611
Depreciation for Year 7 - $ 14,611 * 28.57 % $ 4,174
Computation of Depreciation under 150 % declining balance method
In a declining balance method the salvage value is not considered and the depreciation is applied on a declining balance on one and half times the straight line method depreciation %
Depreciable Basis - same as cost $ 110,000
Depreciation Rate - 14.285 % * 1.50 = 21,4275 %
Depreciation for Year 1 - $ 110,000 * 21.4275 % = $ 23,570
Depreciation Basis for Year 2 $ 86,430
Depreciation for Year 2 - $ 86,430 * 21.4275 % = $ 18,520
Depreciation Basis for Year 3 $ 67,910
Depreciation for Year 3 - $ 67,910 * 21..4275 % $ 14,551
Depreciation Basis for Year 4 $ 53,359
Depreciation for Year 4 - $ 53,359 * 21.4275 % $ 11,433
Depreciation Basis for Year 5 $ 41,925
Depreciation for Year 5 - $ 41,925 * 21.4275 % $ 8,984
Depreciation Basis for Year 6 $ 32,942
Depreciation for Year 6 - $ 32,944 * 21.4275 % $ 7,059
Depreciation Basis for Year 7 $ 25,883
Depreciation for Year 7 - $ 25,883 * 21.4275 % $ 5,546
