Computing Depreciation Using Various Depreciation Methods To demonstrate the computations involved in several methods of depreciating a
Question:
Computing Depreciation Using Various Depreciation Methods
To demonstrate the computations involved in several methods of depreciating a fixed asset, the following data are used for equipment purchased on January 1, 2020.
Cost and residual value | Estimated service life: | |||
Acquisition cost |
| Years | 5 | |
Residual value | $1,000 | Service hours | 20,000 | |
Productive output (units) | 48,000 |
Required
Compute annual depreciation using each of the following methods.
a. Straight-line depreciation: Compute the depreciation rate and amount for each year.
Depreciation Rate | Answer |
2020 | 2021 | 2022 | 2023 | 2024 | |
---|---|---|---|---|---|
Depreciation Expense | Answer | Answer | Answer | Answer | Answer |
b. Units-of-production method using service hours as a measure of input: Compute the depreciation rate and amount of depreciation expense for the first year assuming 4,400 service hours of actual operation.
Depreciation Rate | Answer |
2020 | |
---|---|
Depreciation Expense | Answer |
c. Units-of-production method using units produced as a measure of output: Compute the depreciation rate and amount of depreciation expense for the first year assuming 8,000 units of output.
Depreciation Rate | Answer |
2020 | |
---|---|
Depreciation Expense | Answer |
d. Sum-of-the-years’-digits method: Compute the depreciation amount for each year.
2020 | 2021 | 2022 | 2023 | 2024 |
---|---|---|---|---|
Answer | Answer | Answer | Answer | Answer |
e. Double-declining-balance method: Compute the depreciation amount for each year.
2020 | 2021 | 2022 | 2023 | 2024 |
---|---|---|---|---|
Answer | Answer | Answer | Answer | Answer |
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik