Depreciation ComputationsSYD, DDBPartial Periods Cosby Company purchased a new plant asset on April 1, 2010, at a

Question:

Depreciation Computations—SYD, DDB—Partial Periods Cosby Company purchased a new plant asset on April 1, 2010, at a cost of $774,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Cosby’s accounting period is the calendar year.

(a) Compute the Depreciation for this asset for 2010 and 2011 using the sum-of-the-years’-digits method.

(b) Compute the Depreciation for this asset for 2010 and 2011 using the double-declining-balance method.

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...