Question: Chapter 9 In Class Exercises: Depreciation Methods Scenario: Cost = Useful Life (Years) = Useful Life (Hours) = Salvage Value = a) Calculate the SL
Chapter 9 In Class Exercises: Depreciation Methods
Scenario: Cost = Useful Life (Years) = Useful Life (Hours) = Salvage Value =
a) Calculate the SL annual rate:
30,000 5 140,000 2,000
1) Depreciable Cost = Cost - Salvage ValueDepreciable Cost = -
2) Calculate the Double DB rate:
SL Rate x2 -
= Double DB rate
b) Calculate depreciation expense, accumulated depreciation and book value for the life of the
asset. Depreciable Depreciation Annual Depr Accum.
Year Cost
Rate Exp Depr. Book Value
2010
2011
2012
2013
2014
= Depr. Cost
= Salvage Value
2) Method 2: Units of Activity a) Calculate the Units of Activity rate:
b) Calculate depreciation expense, accumulated depreciation and book value for the life of the
asset. Year Activity Rate
Annual Depr Exp
Accum. Depr. Book Value
SL Rate =
x2 DDB Rate =
Units of Depreciation
2010
2011
2012
2013
2014
30,000
20,000
25,000
40,000
25,000
= Depr. Cost
= Salvage Value
140,000
3) Method 3: Double-Declining Balance
a) Calculate depreciation expense, accumulated depreciation and book value for the life of the asset.
Book Value Depreciation Annual Depr Accum. Year Beg. Of Year Rate Exp Depr. Book Value
2010
2011
2012
2013
2014
30,000
= Salvage Value
PLUG
= Depr. Cost
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