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https://edugen File Edit View Favorites Tools Help Print by: DEBRA GLASS SP. 18 ???? 211-90 / Chapter 11 May Exercise 11-4 on cha Your answer is partially correct. Try again. Pharoah Corp. purchased machinery for $318,150 on May 1, 2017. It is estimated that it will have a useful life of 10 years salvage value of $15,150, production of 242,400 units, and working hours of 25,000. During 2018, Pharoah Corp. uses the machinery for 2,650 hours, and the machinery produces 25,755 units. From the i compute the depreciation charge for 2018 under each of the following methods. (Round intermediate calculations to 2 decimal places, e.g.5.25 and final answers to 0 decimal places, eg. 45,892.) (a) Straight-line (b) Units-of-output (c) Working hours 2,194 (d) Sum-of-the-years'-digits (e) Dedining-balance (use 20% as the annual rate) ill learn while Question Attempts: 1 of 3 used ??Explanation / Answer
d) Sum of years' Digits = [n(n+1)]/2, where n = estimated useful life (i.e. 10 yrs in this case)
= [10(10+1)]/2 = 110/2 = 55
Applicable percentage for 2018 = No. of years of estimated life remaining at the beginning of year/Sum of year Digits
= 10/55
Depreciation for 2018 = (Cost of Asset - Salvage Value)*Applicable percentage
= ($318,150-$15,150)*10/55 = $55,091
e) Depreciation for 2018 = Cost of Asset*Depreciation rate (given)
= $318,150*20% = $63,630
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