Computing Partial Period Depreciation under Multiple Depreciation Methods To demonstrate the computations involved in several methods...
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Computing Partial Period Depreciation under Multiple Depreciation Methods To demonstrate the computations involved in several methods of depreciating a fixed asset, the following information is provided. Cost and residual value Acquisition cost Residual value Estimated service life $7,500 Years 5 $300 Service hours 6,000 Required Productive output (units) 14,400 Compute the annual depreciation using each of the following methods assuming that the asset was purchased on August 1 of the current year. a. Straight-line depreciation: Compute the annual depreciation rate and amount for each year. Carry all decimals in calculations; round final answers to the nearest dollar. Depreciation rate: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $ $ $ $ b. Units-of-production method using service hours as a measure of input: Compute the depreciation rate and amount for the first partial year assuming 540 service hours of actual operation. Depreciation rate: $ Year 1 c. Units-of-production method using units produced as a measure of output: Compute the depreciation rate and amount for the first partial year assuming 1,080 units of output. Depreciation rate: $ Year 1 d. Sum-of-the-years'-digits method: Compute the depreciation amount for each year. Carry all decimals in calculations; round final answers to the nearest dollar. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $ $ $ $ $ $ e. Double-declining-balance method: Compute the depreciation amount for each year. Carry all decimals in calculations; round final answers to the nearest dollar. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $ $ $ $ $ $ Computing Partial Period Depreciation under Multiple Depreciation Methods To demonstrate the computations involved in several methods of depreciating a fixed asset, the following information is provided. Cost and residual value Acquisition cost Residual value Estimated service life $7,500 Years 5 $300 Service hours 6,000 Required Productive output (units) 14,400 Compute the annual depreciation using each of the following methods assuming that the asset was purchased on August 1 of the current year. a. Straight-line depreciation: Compute the annual depreciation rate and amount for each year. Carry all decimals in calculations; round final answers to the nearest dollar. Depreciation rate: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $ $ $ $ b. Units-of-production method using service hours as a measure of input: Compute the depreciation rate and amount for the first partial year assuming 540 service hours of actual operation. Depreciation rate: $ Year 1 c. Units-of-production method using units produced as a measure of output: Compute the depreciation rate and amount for the first partial year assuming 1,080 units of output. Depreciation rate: $ Year 1 d. Sum-of-the-years'-digits method: Compute the depreciation amount for each year. Carry all decimals in calculations; round final answers to the nearest dollar. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $ $ $ $ $ $ e. Double-declining-balance method: Compute the depreciation amount for each year. Carry all decimals in calculations; round final answers to the nearest dollar. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 $ $ $ $ $ $
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Answer rating: 100% (QA)
Answer a Straightline depreciation The annual depreciation amount for straightline depreciation can be calculated using the formula Depreciation Expense Cost Residual Value Service Life Given Cost 750... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
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