Ask Question
BusinessBusiness
6 November, 17:35

Partial-Year Depreciation Equipment acquired at a cost of $105,000 has an estimated residual value of $12,000 and an estimated useful life of 10 years. It was placed into service on May 1 of the current fiscal year, which ends on December 31. A. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method.

Depreciation

Year 1 $6,200

Year 2 $9,300B. Determine the depreciation for the current fiscal year and for the following fiscal year by the double-declining-balance method.

Depreciation

Year 1 $

Year 2 $

+2
Answers (1)
  1. 6 November, 20:50
    0
    Answer and Explanation:

    A. The computation of he depreciation for the current fiscal year and for the following fiscal year using the straight-line method is shown below:-

    = (Original cost - residual value) : (estimated useful life)

    = ($105,000 - $12,000) : (10 years)

    = $9,300

    For the current year, the depreciation expense is

    = $9,300 * 8 months : 12 months

    = $6,200

    The 8 months are calculated from May 1 to December 31

    And, for the following fiscal year, the depreciation expense is $9,300

    B. The computation of depreciation for the current fiscal year and for the following fiscal year using the double-declining-balance method is shown below:-

    But before that

    Rate of depreciation under double declining depreciation = 2 * (1 : Life) * 100

    = 2 * (1 : 10) * 100

    = 20%

    1st Year depreciation = Equipment cost * Rate of depreciation under double declining depreciation * Beginning may : Ending December

    = $105,000 * 20% * 8 : 12

    = $14,000

    2nd year depreciation = Depreciation on $105,000 for the four months at 20%

    = Equipment cost * Rate of depreciation under double declining depreciation * Remaining months : Ending December

    = $105,000 * 20% * 4 : 12

    = $7,000

    and now we calculate the 20% on balance in machinery for 8 months.

    Balance = Equipment cost - 1st Year depreciation - 2nd Year depreciation

    = $105,000 - $14,000 - $7,000

    = $84,000

    Depreciation = Balance Rate of depreciation under double declining depreciation * Beginning may : Ending December

    = $84,000 * 20% * 8 : 12

    = $11,200

    Total depreciation in year 2 = 2nd year depreciation + Depreciation

    = $7,000 + $11,200

    = $18,200
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Partial-Year Depreciation Equipment acquired at a cost of $105,000 has an estimated residual value of $12,000 and an estimated useful life ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Jillis interested in a career as a paramedic. She is trained to use medical equipment, she remains calm under pressure, and she has good bedside manner.
Answers (1)
Dove, Inc., had additions to retained earnings for the year just ended of $630,000. The firm paid out $105,000 in cash dividends, and it has ending total equity of $7.25 million. a.
Answers (1)
How does the quantity supplied of a good with a large elasticity of supply react to a price change
Answers (2)
On May 28, 2021, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $620 million.
Answers (1)
Rhonda and Marta form Yo Yo Corporation. Rhonda transfers land (basis of $55,000 and fair market value of $180,000) for 50 shares plus $20,000 cash. Marta transfers $160,000 cash for 50 shares in Yo Yo Corporation. a.
Answers (2)
New Questions in Business
When the consumer price index rises, the typical family a. has to spend more dollars to maintain the same standard of living. b. can spend fewer dollars to maintain the same standard of living. c. finds that its standard of living is not affected. d.
Answers (1)
A magazine subscription costs $45 per year at the beginning of each year, or $115 now for a three-year subscription. If the subscriber elects to pay the $115 now, the rate of return on the investment will be nearest to:
Answers (2)
The second step in rational decision making is to: choose the solution that maximizes value. identify the criteria that are important in making the decision. evaluate the alternatives. implement the alternative.
Answers (1)
What impact will a spike in wages cause to the labor demand curve?
Answers (1)
A company issued 8%, 15-year bonds with a par value of $500,000 that pay interest semiannually. The market rate on the date of issuance was 8%.
Answers (1)
Home » Business » Partial-Year Depreciation Equipment acquired at a cost of $105,000 has an estimated residual value of $12,000 and an estimated useful life of 10 years. It was placed into service on May 1 of the current fiscal year, which ends on December 31. A.
Sign Up Forgot Password?