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 employeehas prepared depreciation schedules for this asset using three different methods to compare the results of using one method with theresults 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-YearStraight-LineYears'-DigitsBalance1$ 11,340$ 18,900$ 25,200211,34015,12015,120311,34011,3409,072411,3407,5605,443511,3403,7801,865Total$ 56,700$ 56,700$ 56,700

Under straight line method of depreciation, the value or cost of asset is reduced equally over the each period until it reaches its salvage value. It is calculated by simply dividing the cost of an asset its salvage value, by the useful life. It is assumed that, in the above question salvage value of plant is nil. Depreciation per year = Cost of plant - Salvage value / Useful lifeIn the above problem, depreciation is calculated under straight line method is $11340 each year for 5 years 11340 = ( Cost of Asset - 0) / 5 year Cost of Asset = 11340 x 5 Cost of Asset = $56700

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Business

Accounting

What is the cost of the asset being depreciated? Cost of asset %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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