b. Double Declining-Balance Depreciation Schedule Accurnulated Depreciation Depreciation, Book Value, Expense End of Year End of Year Year $ S 36,000 Original cost 1 2 3 4 36,000 18,000 9,000 72,000 36,000 18,000 9,000 5,400 Calculations: Depreciable Year Balance Rate Yearly Depreciation 1 72,000 0.500000 $ 36,000 2 $ 36,000 0.500000 $ 18,000 3 18,000 0.500000 $ 9,000 Since depreciation cannot cause book value to fall below residual value: Depreciable Residual Year Balance Value Yearly Depreciation 4 $ 9,000 5,400 3.600 2. Accumulated Depreciation Cash Equipment Gain on Sale of Equipment 13.750 3. 16,650 Accumulated Depreciation Loss on Sale of Equipment Cash Equipment 3,700 2011, 2012, and 2013, by (a) the straight-line method, (b) the units-of-production method, and (c) the double-declining-balance method. PR 10-48 Depreciation by two methods; sale of fixed asset New tire retreading equipment, acquired at a cost of $72,000 at the beginning of a fiscal year, has an estimated useful life of four years and an estimated residual value of $5,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected. In the first week of the fourth year, the equipment was sold for $13,750. Instructions 1. Determine the annual depreciation expense for each of the estimated four years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double- declining-balance method. The following columnar headings are suggested for each schedule: Accumulated Depreciation, End of Year Depreciation Expense Year Book Value, End of Year 2. Journalize the entry to record the sale. 3. Journalize the entry to record the sale, assuming that the equipment sold for $3,700 instead of $13,750. PR 10.SR Telaffivad teinelhedinte Clipboard Font Alignment Number C3 X fo A B J KL 33 34 D F G Double Declining Balance Depreciation Schedule Accumulated Depreciation Depreciation, Book Value, Expense End of Year End of Year Year $ s 36,000 35 36 37 38 39 40 41 42 43 44 45 Original cost 1 2 3 4 36,000 18,000 9,000 72.000 36,000 18.000 9,000 5,400 Calculations: 46 47 48 Depreciable Year Balance x Rate Yearly Depreciation 1 72,000 0.500000 S 36,000 2 36,000 0.500000 $ 18,000 3 S 18,000 0.500000 S 9,000 Since depreciation cannot cause book value to fall below residual value Depreciable Residual Year Balance Value Yearly Depreciation 4 9,000 $ 5.400 S 3,600 49 50 51 52 53 54 55 Pr. 10-4B Ready 0 1 There are