Gradebook ORION Downloadable eTextbook nt CALCULATOR·FULL SCREEN Your answer is

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Gradebook ORION Downloadable eTextbook nt CALCULATOR·FULL SCREEN Your answer is partially correct. Try again. Whispering Company purchased equipment for $258,335 on October 1, 2017.I is estimated that the equipment will have a useful life of & Compute depreciation expense under each of the following methods. Whispering is on a calendar-year basis ending December 31. (Round rate per hour and rate per unit to 2 years and a salvage value of $14,520 units and estimated working hours are 20,100. During 2017, Whispering uses the equipment for 520 hours and the equipment produces 1,000 units. decimal places,e.g. 5.35 and final answers to O decimal places, e.g. 45,892.) (a) Straight-line method for 2017 30477 (b) Activity method (units of output) for 2017 (e) Activity method (working hours) for 2017 (d) Sum-of-the-years'-digits method for 2019 (e) Double-declining-balance method for 2018 2488 16146 Click if you would like to Show Work for this question: Qpen Show Work Question Attempts: 1 of 3 used SAVE FOR LATER S SUBMIT ANSWER All Rights Reserved. A Division of 34 MacBook Air

Explanation / Answer

Equipement purcahsed on 1st oct.2017 = 258335

whisper is on a calender year basis of ending 31st december

salvage value = 14520

Useful life = 8 years

Depriciation of 3 months under straight line basis = ((cost - salvage value)/8)*(3/12)

= ((258335 - 14520) / 8)*(1/4)

= (243815 / 8)*(1/4)

= 7619

(b) units of output = (cost - salvae value)/40300*1000

= (258335 - 14520)/40300*1000

= 243815/40300*1000

= 6050

(c) Activity method = cost after salvage value / total activity hours * actual hour used

= 243815/20100*520

= 6308

(d) sum of years digit method - 1+2+3+4+5+6+7+8 = 36

Depriciable base = cost - salvage value

= 258335 - 14520

= 243815

Sum of years digits = 8*(8+1)/2 = 36

Depriciation expense for 2019 = 9 months dep. on the ratio of 7/36 and 3 months dep. of the ratio of 6/36

= (243815*7/36)*(9/12) + (243815*6/36)*(3/12)

= 35556.35 + 10158.36

= 45715

(e) Double declining balance method

Under the double declining balance method, double means twice or 200% of the straight line depriciation rate.

Opening Book value = 258335

Straight line dep. rate = 100/8 = 12.5 %

under double declining balance dep. rate = 2* straight line dep rate = 2*12.5%

= 25%

Please note all values are in $

in case of further clarification required plesae comment.

Year NBV opening Double declining Net Book closing 2017 258335 16145.9375 242189.0625 2018 242189.1 60547.26563 302736.3281

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