FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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What is the cost of the asset being depreciated?
Cost of asset
$
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Transcribed Image Text:What is the cost of the asset being depreciated? Cost of asset $
Sunland Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee
has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the
results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1)
the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method.
Sum-of-the-
Double-Declining-
Year
Straight-Line
Years'-Digits
Balance
1
$ 11,340
$ 18,900
$ 25,200
2
11,340
15,120
15,120
3
11,340
11,340
9,072
4
11,340
7,560
5,443
5
11,340
3,780
1,865
Total
$ 56,700
$ 56,700
$ 56,700
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Transcribed Image Text:Sunland Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method. Sum-of-the- Double-Declining- Year Straight-Line Years'-Digits Balance 1 $ 11,340 $ 18,900 $ 25,200 2 11,340 15,120 15,120 3 11,340 11,340 9,072 4 11,340 7,560 5,443 5 11,340 3,780 1,865 Total $ 56,700 $ 56,700 $ 56,700
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