Question
Straight-Line, Declining-Balance, Sum-Of-The-Years'-Digits, and MACRS Methods A machine is purchased January 1 at a cost of $68,300. It is expected to serve for eight years
Straight-Line, Declining-Balance, Sum-Of-The-Years'-Digits, and MACRS Methods
A machine is purchased January 1 at a cost of $68,300. It is expected to serve for eight years and have a salvage value of $2,300.
Required:
1. Prepare a schedule showing depreciation for each of the eight years and the book value at the end of each year using the following methods:
a. Straight-line
| Straight-Line Method | ||
| Year | Annual Depreciation | Ending Book Value |
| 1 | $fill in the blank 54102307dfa3ffd_1 | $fill in the blank 54102307dfa3ffd_2 |
| 2 | fill in the blank 54102307dfa3ffd_3 | fill in the blank 54102307dfa3ffd_4 |
| 3 | fill in the blank 54102307dfa3ffd_5 | fill in the blank 54102307dfa3ffd_6 |
| 4 | fill in the blank 54102307dfa3ffd_7 | fill in the blank 54102307dfa3ffd_8 |
| 5 | fill in the blank 54102307dfa3ffd_9 | fill in the blank 54102307dfa3ffd_10 |
| 6 | fill in the blank 54102307dfa3ffd_11 | fill in the blank 54102307dfa3ffd_12 |
| 7 | fill in the blank 54102307dfa3ffd_13 | fill in the blank 54102307dfa3ffd_14 |
| 8 | fill in the blank 54102307dfa3ffd_15 | fill in the blank 54102307dfa3ffd_16 |
b. Double-declining-balance (round to two decimal places)
| Double-Declining-Balance Method | ||
| Year | Annual Depreciation | Ending Book Value |
| 1 | $fill in the blank 5ea96806e015038_1 | $fill in the blank 5ea96806e015038_2 |
| 2 | fill in the blank 5ea96806e015038_3 | fill in the blank 5ea96806e015038_4 |
| 3 | fill in the blank 5ea96806e015038_5 | fill in the blank 5ea96806e015038_6 |
| 4 | fill in the blank 5ea96806e015038_7 | fill in the blank 5ea96806e015038_8 |
| 5 | fill in the blank 5ea96806e015038_9 | fill in the blank 5ea96806e015038_10 |
| 6 | fill in the blank 5ea96806e015038_11 | fill in the blank 5ea96806e015038_12 |
| 7 | fill in the blank 5ea96806e015038_13 | fill in the blank 5ea96806e015038_14 |
| 8 | fill in the blank 5ea96806e015038_15 | fill in the blank 5ea96806e015038_16 |
c. Sum-of-the-years'-digits (round to two decimal places)
| Sum-Of-The-Years'-Digits Method | ||
| Year | Annual Depreciation | Ending Book Value |
| 1 | $fill in the blank 0d08d0f9a020042_1 | $fill in the blank 0d08d0f9a020042_2 |
| 2 | fill in the blank 0d08d0f9a020042_3 | fill in the blank 0d08d0f9a020042_4 |
| 3 | fill in the blank 0d08d0f9a020042_5 | fill in the blank 0d08d0f9a020042_6 |
| 4 | fill in the blank 0d08d0f9a020042_7 | fill in the blank 0d08d0f9a020042_8 |
| 5 | fill in the blank 0d08d0f9a020042_9 | fill in the blank 0d08d0f9a020042_10 |
| 6 | fill in the blank 0d08d0f9a020042_11 | fill in the blank 0d08d0f9a020042_12 |
| 7 | fill in the blank 0d08d0f9a020042_13 | fill in the blank 0d08d0f9a020042_14 |
| 8 | fill in the blank 0d08d0f9a020042_15 | fill in the blank 0d08d0f9a020042_16 |
2. Assuming a seven-year class of property, compute MACRS depreciation expense for each year of the assets life.
| MACRS method | |||
| Year | Original Cost | MACRS Depreciation Rates 7-Year Class of Property | Depreciation Expense |
| 1 | $68,300 | 14.29% | $fill in the blank b608af0bdfa7fda_1 |
| 2 | 68,300 | 24.49% | fill in the blank b608af0bdfa7fda_2 |
| 3 | 68,300 | 17.49% | fill in the blank b608af0bdfa7fda_3 |
| 4 | 68,300 | 12.49% | fill in the blank b608af0bdfa7fda_4 |
| 5 | 68,300 | 8.93% | fill in the blank b608af0bdfa7fda_5 |
| 6 | 68,300 | 8.92% | fill in the blank b608af0bdfa7fda_6 |
| 7 | 68,300 | 8.93% | fill in the blank b608af0bdfa7fda_7 |
| 8 | 68,300 | 4.46% | fill in the blank b608af0bdfa7fda_8 |
| Total | $fill in the blank b608af0bdfa7fda_9 | ||
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Fundamental Managerial Accounting Concepts
Authors: Thomas Edmonds
10th Edition
126410068X, 9781264100682
