Problem $9-6$A Problem $9-6$A

REQUIRED:

West Coast Tour runs boat tours along the West Coast of British Columbia. On March $5,2023,$ it purchased, with cash, a cruising boat for $$828,000,$ having a useful life of $10$ years or $13,250$ hours, with a residual value of $$192,000($see summary of this information below$).$ The company's year$-$end is December $31.$ Calculate depreciation expense using each of the methods $($straight$-$line, double$-$declining, and units$-$of$-$production$)$ for the fiscal years $2023,2024,$ and $2025$ by completing the Summary Table at the bottom of this page. You may wish to use the templates for each of the depreciation methods that are included below $($but this is not required$).$

Cost of boat $$828,000$

Expected useful life $($years$)10$ NOTE THAT THE FOLLOWING TEMPLATES FOR EACH OF THE DEPRECIATION METHODS ARE NOT REQUIRED TO COMPLETE, BUT MAY BE USEFUL:

Expected number of hours to be used $13,250$

Estimated residual value $$192,000$

Date purchased March $5,2023$ STRAIGHT$$LINE DEPRECIATION

Depreciation is calculated using the half$-$year convention Calculation of cost to be depreciated:

Cost of boat $$828,000$

Year Actual Hours Used Less: Estimated residual value $192,000$

Cost to be depreciated $$636,000$

$2023720$ Calculation of depreciation rate:

$20241,780100\%$

$20251,535$ Divide by: Expected useful life $($years$)10$

Annual rate $10\mathrm{.}0\%$

REQUIRED: Times: Adjustment for half$-$year rule $5\mathrm{.}0\%$

Calculate depreciation expense using each of the methods $($straight$-$line, double$-$declining, and units$-$of$-$production$)$ for the fiscal years $2023,2024,$ and $2025$ by completing the Summary Table at the bottom of this page. Rate for $20235\mathrm{.}0\%$

Depreciation for the Period End of Period

Year Cost to be Depreciated Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value

$ $-0-$

$2023$ $ $636,0005\mathrm{.}0\%$ $ $31,800$ $ $31,800796,200$

$2024636,00010\mathrm{.}0\%63,60095,400732,600$

$2025636,00010\mathrm{.}0\%63,600159,000669,000$

Total $ $159,000$

DOUBLE$$DECLINING BALANCE DEPRECIATION

Calculation of depreciation rate:

$2$

Divide by: Expected useful life $($years$)10$

$20\mathrm{.}0\%$

Times: Adjustment for half$-$year rule $0\mathrm{.}0\%$

Rate for $202320\mathrm{.}0\%$

Depreciation for the Period End of Period

Year Beginning$-$of$-$Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value

$ $-0-$

$2023$ $ $828,00010\mathrm{.}0\%$ $ $82,800$ $ $-0-$ $ $-0-$

$2024745,20020\mathrm{.}0\%149,040-0--0-$

$2025596,16020\mathrm{.}0\%119,232-0--0-$

Total $ $351,072$

UNITS$$OF$$PRODUCTION DEPRECIATION:

Calculation of depreciation expense per unit:

Cost of boat $$-0-$

Less: Estimated residual value $-0-$

$$-0-$

Divide by: Expected number of hours to be used $-0-$

Depreciation expense per unit $$-0\mathrm{.}00-$

Depreciation for the Period End of Period

Year Number of Hours Depreciation Per Unit Depreciation Expense Accumulated Depreciation Book Value

$ $-0-$

$2023-0-$ $$-0-$ $$-0-$ $$-0--0-$

$2024-0--0--0--0--0-$

$2025-0--0--0--0--0-$

Total $ $-0-$

SUMMARY TABLE $($REQUIRED TO COMPLETE$)$:

Depreciation Method

Year Straight$-$Line Double$-$Declining$-$Balance Units$-$of$-$Production

$2023$ $ $-0-$ $ $-0-$ $ $-0-$

$2024-0--0--0-$

$2025-0--0--0-$

Totals $ $-0-$ $ $-0-$ $ $-0-$