A computer was purchased on January 1 at a cost of $12,500. It has an estimated useful life of five years and an estimated salvage value of $1,250. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below Open spreadsheet Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the double-declining-balance method. Computer Depreciation Schedule Book Value Accumulated Beginning Depreciation Depreciation Book Value Year of Year Rate Expense End of Year End of Year 1 2. % 3. % 4

A computer was purchased on January 1 at a cost of $12,500. It has an estimated useful life of five years and an estimated salvage value of $1,250. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below Open spreadsheet Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the double-declining-balance method. Computer Depreciation Schedule Book Value Accumulated Beginning Depreciation Depreciation Book Value Year of Year Rate Expense End of Year End of Year 1 2. % 3. % 4

Name: Double-Declining-Balance DepreciationA computer was purchased on Janu
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Description: Double-Declining-Balance DepreciationA computer was purchased on January 1 at a cost of $12,500. It has an estimated useful life of five years and an estimated salvage value of $1,250.This information has been collected in the Microsoft Excel Online

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 3MCQ: When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash...

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To test your formulas, assume the machine purchased had an estimated useful life of three years (20,000, 30,000, and 50,000 hours, respectively). Enter the new information in the Data Section of the worksheet. Does your depreciation total 320,000 under all three methods? There are three common errors made by students completing this worksheet. Lets clear up two of them. One, an asset that has a three-year life should have no depreciation claimed in Year 4. This can be corrected using an =IF statement in Year 4. For example, the correct formula in cell C32 is =IF(B32D9,0,(D7D8)/D9) or =IF(B32D9, 0, SLN(D7, D8, D9)). You may wish to edit what you have already entered rather than retype it. Two, as mentioned in requirement 2, the double-declining-balance calculation needs to be modified in the last year of the assets life. Assuming you have already modified the formula for Year 4 (per instructions in step 2), alter the formula for Year 3 also. If you corrected any formulas, test their correctness by trying different estimated useful lives (between 3 and 8) in cell E9. Then reset the Data Section to the original values, save the revised file as DEPREC2, and reprint the worksheet to show the correct formulas. The third common error doesnt need to be corrected in this problem. The general form of the double-declining-balance formula needs to be modified to check the net book value of the asset each year to make sure it does not go below salvage value. =DDB does this automatically, but if you are writing your own formulas, this gets very complicated and is beyond the scope of the problem.