Alpha Company has the following items in its equipment account DepreciationCostS
ID: 2538343 • Letter: A
Question
Alpha Company has the following items in its equipment account DepreciationCostSalvage Value Asset & Date Method of 1. Delivery Truck 4/30/15) Unit of Ativity$60,000$11000 Office Furniture 2. Straight Line $15,000 $300 Double $5,000$700 3. Computer (4/1/15) The delivery truck is estimated to have a life cycle of 200,000 miles. It was driven for 1. 16,500 miles in 2015& 24,600 miles in 2016 &25,000 miles in 2017 2. The Office Furniture has a life expectancy of 7 years. 3. The Computer has a life expectancy of 4 years. any pe Round depreciation expenses to the nearest dollar. Use this information to compute for Fiscal Year 2017 the following values: r unit calculations to the nearest half penny. Round all annual 1. Book Value of the Delivery Truck 2. Depreciation Expense Truck 3. Book Value of the Office Furniture 4. Depreciation Expense- Office Furniture 5. Book Value of the Computer 6. Depreciation Expense ComputerExplanation / Answer
Answer
Cost
60000
Salvage Value
11000
Depreciable base
$49000
Life cycle (miles)
200000
Depreciation per mile
$0.245
Year
Depreciation expenses [miles run x 0.245]
2015
4042.5
2016
6027
2017
6125
Total
$16194.5
Cost
60000
(-) Total Depreciation till 2017
16194.5
Book Value at 2017 end
$43805.5
Cost
15000
Salvage Value
300
Depreciable base
$14700
Life (in years)
7
Annual SLM depreciation
$2100
Year
Depreciation expenses
2015
[2100x7months/12months] 1225
2016
2100
2017
2100
Total
$5425
Cost
15000
Total Depreciation till 2017
5425
Book Value at 2017 end
$9575
Working
Cost
5000
Salvage Value
700
Depreciable base
$4300
Life (in years)
4
Annual SLM depreciation
1075
SLM rate
0.25
DDB Rate
$50%
Depreciation working
Year
12 months [Depreciation @50% of book value]
3 months [Jan-Mar]
9 months [Apr-Dec]
Total
1
2500
0
1875
$1875
2
1250
625
937.5
$1562.5
3
550
312.5
412.5
$725
4
0
137.5
$137.5
Answer
Year
Book Value
rate
Depreciation expense
Closing Book Value
2015
$5000
50%
$1875
$3125
2016
$3125
50%
$1562.5
$1562.5
2017
$1562.5
$725
$837.5
Total
$4162.5
Cost
$5000
Total Depreciation till 2017
$4162.5
Book Value at 2017 end
$837.5
Cost
60000
Salvage Value
11000
Depreciable base
$49000
Life cycle (miles)
200000
Depreciation per mile
$0.245
Year
Depreciation expenses [miles run x 0.245]
2015
4042.5
2016
6027
2017
6125
Total
$16194.5
Cost
60000
(-) Total Depreciation till 2017
16194.5
Book Value at 2017 end
$43805.5
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