Computing Partial Period Depreciation under Multiple Depreciation Methods To demonstrate the computations involved in several methods of depreciating a fixed asset, the following information is
Computing Partial Period Depreciation under Multiple Depreciation Methods
To demonstrate the computations involved in several methods of depreciating a fixed asset, the following information is provided.
| Cost and residual value | Estimated service life | ||
| Acquisition cost | $32,500 | Years | 5 |
| Residual value | $1,300 | Service hours | 26,000 |
| Productive output (units) | 62,400 |
Required
Compute the annual depreciation using each of the following methods assuming that the asset was purchased on August 1, 2020.
a. Straight-line depreciation: Compute the annual depreciation rate and amount for each year.
Carry all decimals in calculations; round final answers to the nearest dollar.
| Depreciation rate: |
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
b. Units-of-production method using service hours as a measure of input: Compute the depreciation rate and amount for the first partial year assuming 2,340 service hours of actual operation.
| Depreciation rate: |
| 2020 |
|---|
c. Units-of-production method using units produced as a measure of output: Compute the depreciation rate and amount for the first partial year assuming 4,680 units of output.
| Depreciation rate: |
| 2020 |
|---|
d. Sum-of-the-years-digits method: Compute the depreciation amount for each year.
Carry all decimals in calculations; round final answers to the nearest dollar.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
e. Double-declining-balance method: Compute the depreciation amount for each year.
Carry all decimals in calculations; round final answers to the nearest dollar.
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
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Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
