Ul TinUADP-Aecounting For M LECT/PT15 2018/SPRING/ADP Week 4: Assets and Stateme

Question

Ul TinUADP-Aecounting For M LECT/PT15 2018/SPRING/ADP Week 4: Assets and Statement Analysis/Chapter 11 Qui Morgana Film Productions Inc. purchased a copier on Jan 1, 2011 for $10,500 with a Co residual value of $1500. Useful life is 5 years or 100,000 copies Copies produced in 2011: 15000 copies; in 2012: 11,000 copies Using the Activity/Units of Production Method, calculate: a) The Depreciation Expense in 2011 &2012 ed Moa Tech in 2011 in 2012 b) Accumulated depreciation at the end of 2012 Sen ?P0 5 6 7 8 R YU E

Explanation / Answer

Units of Production method: Cost of Copier: $ 10,500 Salvage value: $1500 Depreciable Amount (Cost-Salvage): 10500-1500 = $ 9000 Life: 100,000 copies Depreciation per Copy: Depreciable Amount/ Life $ 9000 /100,000 = $ 0.09 per copy A. Depreciation Expense; 2011 (15000copies @ 0.09): 1350 2012 (11000 copies @ 0.09): 990 B. Accumulated Depreciation in 2012 (1350+990): $ 2340 C. Book value at end of 2012: Cost of Assets 10500 Less: Accumulated Depreciation 2340 Book value at end of 2012: 8160 Double Declining Method: Cost of Copier: Salvage Value: Life: 5 years Rate under SLM: 20% Rate under DDM (20*2) = 40% A. Depreciation expense: 2011 (11800*40%): 4720 2012(11800-4720)*40% 2832 B. Accumulated Depreciation in 2012 (4720+2832): $ 7552 C. Book value at end of 2012: Cost of Assets 11800 Less: Accumulated Depreciation 7552 Book value at end of 2012: 4248

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