Estimating Useful Life and Percent Used Up The property and equipment footnote f

Question

Estimating Useful Life and Percent Used Up
The property and equipment footnote from the Deere & Company Equipment and Operations segment follows.

Property and Depreciation A summary of property and equipment at October 31 follows.

23

11

8

5

Total property and equipment additions in 2015, 2014 and 2013 were $666 million, $1,016 million and $1,158 million, and depreciation was $692 million, $696 million and $637 million, respectively.

a. Compute the estimated useful life of Deere’s depreciable assets at year-end 2015.

Round answer to one decimal place.
______ years

b. Estimate the percent used up of Deere’s depreciable assets at year-end 2015.

Round answer to one decimal place (ex: 0.2345 = 23.5%)
______%

Useful Lives* Property and Equipment ($ millions) (Years) 2015 2014 *Weighted averages Land $114 $120 Buildings and building equipment

23

2,794 3,037 Machinery and equipment

11

4,833 5,089 Dies, patterns, tools, etc

8

1,567 1,552 All other

5

875 889 Construction in progress 345 530 Total at cost 10,528 11,217 Less accumulated depreciation 5,846 5,694 Total $4,682 $5,523

Explanation / Answer

Average useful life= Total depreciable asset cost/depreciation expenses

Average useful life=( Building and building equipment+ machinery and equipment+ dies, patterns, tools etc, All other)/ $692 million

Average useful life=($2794+ 4833+ 1567+ 875)million/$692 million

Average useful life=$10069 million/$692 million= 14.55 years

Percent used up= Accumulated depreciation/Depreciable asset cost

Percent used up=$5846 million/$10069 million= 58.06%

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.