Examine the comparison of depreciation methods in the schedule at the top of page 244. Although the amount of depreciation recorded each year varies, the total depreciation over the asset's full life is the same.

Required:

Prepare a graph comparing the three depreciation methods. Make sure the graph is clearly labeled. The declining balance method and the sum-of-the-years’-digits method are often referred to as accelerated depreciation methods.
Use the graph to explain what is meant by accelerated depreciation.

Data from Page 244

Transcribed Image Text:

COMPARISON OF THREE METHODS OF DEPRECIATION Plant asset: Computer Depreciation method: Comparison Year Original cost: $2,000.00 Estimated salvage value: $175.00 Estimated useful life: 5 years Sum-of-the-Years'-Digits Method Straight-Line Method Double Declining-Balance Method $365.00 $800.00 -234 365.00 480.00 365.00 288.00 $ 608.33 486.67 365.00 365.00 172.80 243.33 5 365.00 84.20 121.67 Total Depreciation $1,825.00 $1,825.00 $1,825.00