Exercise 11-2 Sunland Company acquired a plant asset at the beginning of Year 1.

Question

Exercise 11-2 Sunland Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years-digits method, and (3) the double-declining-balance method Double- Declining- Balance Sum-of-the Year Straight-Line Years'-Digits $10,800 10,800 10,800 10,800 10,800 $54,000 $18,000 14,400 10,800 7,200 3,600 $54,000 $24,000 14,400 8,640 5,184 1,776 $54,000 2 3 4 Total Answer the following questions Your answer is incorrect. Try again What is the cost of the asset being depreciated? Cost of asset 54000 LINK TO TEXT

Explanation / Answer

Double declining depreciation rate = 1/5*2 = 40% 1 Cost of asset = 24000/40%= $60000 2 Salvage value = 60000-54000 = $6000

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