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	$62,500	Years	5
Residual value	$2,500	Service hours	50,000
		Productive output (units)	120,000

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.

Depreciation rate:

Answer

2020	2021	2022	2023	2024	2025
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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 4,500 service hours of actual operation.

Depreciation rate:

Answer

2020

Answer

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 9,000 units of output.

Depreciation rate:

Answer

2020

Answer

d. Sum-of-the-years-digits method: Compute the depreciation amount for each year.

2020	2021	2022	2023	2024	2025
Answer	Answer	Answer	Answer	Answer	Answer

e. Double-declining-balance method: Compute the depreciation amount for each year.

2020	2021	2022	2023	2024	2025
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