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Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Depreciation Accumulated Depreciation, Year Expense End of Year 1 2 3 4 5 b. Double-declining-balance method Year Depreciation Expense 1 2 3 4 5 Accumulated Depreciation, End of Year Book Value, End of Year $ $ $ 48,400 $ $ Book Value, End of Year

Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Depreciation Accumulated Depreciation, Year Expense End of Year 1 2 3 4 5 b. Double-declining-balance method Year Depreciation Expense 1 2 3 4 5 Accumulated Depreciation, End of Year Book Value, End of Year $ $ $ 48,400 $ $ Book Value, End of Year

Cornerstones of Financial Accounting
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 79.1C
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Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Depreciation Accumulated Depreciation, Year Expense End of Year 1 2 3 4 5 b. Double-declining-balance method Year Depreciation Expense 1 2 3 4 5 Accumulated Depreciation, End of Year Book Value, End of Year $ $ $ 48,400 $ $ Book Value, End of Year
Transcribed Image Text:Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $562,500 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $48,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $82,400. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Depreciation Accumulated Depreciation, Year Expense End of Year 1 2 3 4 5 b. Double-declining-balance method Year Depreciation Expense 1 2 3 4 5 Accumulated Depreciation, End of Year Book Value, End of Year $ $ $ 48,400 $ $ Book Value, End of Year
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