FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The formula for double-declining-balance
- Book Value × 40% = Depreciation Expense.
- (Book Value – Residual Value) × 40% = Depreciation Expense.
- (Book Value – Residual Value) × 20% = Depreciation Expense.
- (Original Cost × 30%) – Residual Value = Depreciation Expense.
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- An equipment costing 50,000 has a book value of 4,000 after 8yrs. The depreciation is computed by using the constant percentage of the declining book value. Compute for the salvage value after 12 years.arrow_forwardA plant asset cost R.O.192,000 and is estimated to have a R.O.24,000 residual value at the end of its 8-year useful life. The book value of the asset at the end of the third year using the double-declining-balance method would be Select one a. RO.27,000. b. RO.144,000. CRO 81,000. d. R.O.108,000.arrow_forwarda. Using straight-line depreciation, what is the book value after five years for an asset costing $150,000 that has a salvage value of $35,000 after 20 years? What is the depreciation charge in the sixth year? b. Using declining-balance depreciation with d = 25 percent, what is the book value after five years for an asset costing $150,000? What is the depreciation charge in the sixth year? c. What is the depreciation rate using declining balance for an asset costing $150,000 and having a salvage value of $35,000 after 20 years? a. The book value after five years using straight-line depreciation is $. (Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)arrow_forward
- Can you explain don't understandarrow_forwardYou are to create a year-by-year depreciation schedule for an asset that has a cost basis (B) of $950,000 and estimated salvage value (SV10) of $80,000 after 10 years. For the straight-line and 200% declining balance methods, use a depreciable life (N) of 10 years. For MACRS, use a recovery period (N) of 7-yrs. ΕΟΥ, Κ 0 1 2 3 4 5 6 7 8 9 10 Straight-Line dk BVk 950,000 Declining Balance dk BVk 950,000 MACRS dk BVk 950,000 Upload your table AND summary calculations to this assignment. You do not need to show EVERY calculation but you do need to include the equations you used to complete the table.arrow_forwardD. Double Declining Method Problem: Determine the rate of depreciation, the total depreciation up to end of the 8th year, and the book value at the end of 8 years for an asset that costs P15,000 now and has an estimated scrap value of P2,000 at the end of 10 years by (a) declining balance method and (b) the double declining balance method. (Make a table in Microsoft Excel)arrow_forward
- Assuming modified accelerated cost-recovery-system depreciation and an economic life of five years, what is the book value after three years of an asset of initial cost P? OA. 0.288P OB. 0.422P OC. 0.808P OD. 0.852Parrow_forwardCalculate the depreciation in dollar and percentage terms, the yearly depreciation in percentage terms, and the percentage residual value based on the figures provided below. Round each answer to 2 decimals. Type your answers to the calculations in Table 7 of your data file. Remember to show your calculations. The gross capitalized cost of a vehicle is $18,200. At the end of a two-year lease, the residual value is $8,500. What is the depreciation on the vehicle in dollar and percentage terms? What is the yearly depreciation in percentage terms? What is the percentage residual value?arrow_forwardThe asset - vehicle worth £21,200 will be depreciated by 10% at the end of the year. Which nominal accounts should be debited and credited, respectively? a) Debit Depreciation A/c & Credit Non-Current Asset A/c b) Debit Inventory A/c & Credit Depreciation A/c c) Debit Balance Sheet A/c & Credit Profit or Loss A/carrow_forward
- An income producing asset costs $6,630 and will be depreciated using 150% Declining Balance with a $896 salvage value over 13 years. What is the Book Value at the end of year 1?arrow_forwardUsing the following information, create a Double declining, depreciation schedule. Van cost:34,440 Residual value: 1,722 Useful Life: 3 Years Example: Straight-line depreciation Schedule. Years Value at the beginning of the year Depreciation End of year Value 1 34,440 10,906 23,535 2 23,535 10,906 12,628 3 12,628 10,906 1,722arrow_forwardAn asset costs $290,000 and is classified as a ten-year asset. What is the annual depreciation expense for the first three years under the straight-line and the modified accelerated cost recovery systems of depreciation? Be sure to apply the half-year convention to straight-line depreciation. Use Exhibit 9.4 to answer the question. Round your answers to the nearest dollar. Straight-line depreciation: Year Depreciation expense 1 $ 2 $ 3 $ Accelerated cost recovery system of depreciation: Year Depreciation expense 1 $ 2 $ 3 $arrow_forward
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