ACC305 Week 5 E11 5 page 599 and E11 10 page 600

Question: #9230

E11-5 (page 599) - Depreciation methods; solving for unknowns ● LO2

For each of the following depreciable assets, determine the missing amount (?). Abbreviations for depreciation methods are SL for straight line, SYD for sum-of-the-years’ digits, and DDB for double-declining balance.

Exercise 11-5

Asset A:

Straight-line rate is 20% (1 ÷ 5 years) x 2 = 40% DDB rate

$24,000

= $60,000 = Book value at the beginning of year 2

.40

Cost - (Cost x 40%) = $60,000

.60Cost = $60,000

Cost = $100,000

Asset B:

Sum-of-the-years’ digits is 36 {[8 (8 + 1)]÷2}

($40,000 - residual) x 7/36 = $7,000

$280,000 – 7residual

-------------------------- = $7,000

$280,000 - 7residual = $252,000

7residual = $28,000

Residual = $4,000

Asset C:

$65,000 - 5,000

Solution: #9267

ACC305 Intermediate Accounting III Week 5 E11-5 (page 599) and E11-10 (page 600)

E11-5 (page 599) - Depreciation methods; solving for unknowns ● LO2 For each of the following depreciable assets, determine the missing amount (?). Abbreviations for depreciation methods are SL for straigh...