Culver Company purchases equipment on January 1, Year 1. atcost of $483,070. The

Question

Culver Company purchases equipment on January 1, Year 1. atcost of $483,070. The asset expected to have service life cf 12 years and a salvage value of $41,200 Compute the amount af depreciation for Years 1 through 3 using the straight-line depreciation method. (Round answers to 0 decimal places,e.g. 5,125.) Depreciation for Year 1 Depreciation for Year 2 Dapreciation far Year 3 sum-of-the-ycars-digit Compute the amount af depreciation for each at Years 1 through 3 using the Depreciation for Year 1 Depreciation for Year 2 methad Dapreciation for Year 3 put the amount ar d reciation for each of Years 1 through 3 L ing the double decining balance method Round depreciation rate to 2 decimal Piacos, e g 15.84%. Round answers to 0 decinal places. g. 45,8 Depreciation for Year 1 Dapreciation far Ycar 2 Depreciation for Year 3

Explanation / Answer

1)   

Straight line depreciation =asset value-salvage value/useful life

483,070-41,200/12=441,870/12=36822.5

2). SYD depreciation

Depreciation base* Remaining useful life/ sum of the years digit

Sum of the year s digit =n(n+1)/2=. 12(12+1)/2=78

Depreciation base 483,070-41,200=441,870

D.B. D.F. Depreciation

441,870. 12/78. 441,870*12/78. =67,980

441,870. 11/78. 441,870*11/78=. 62,315

441,870. 10/78. 441,870*10/78=. 56,650

441,870. 9/78. 441,870*9/78= 50,985

3).   

Double declining balance method

Depreciation rate =100/asset useful life *2=100/12*2=16.67

Depreciation expenses for 1 year =483,070*16.67=80,527.77

Depreciation expenses for 2 year =483,070-80527.77*16.67=67103.79

Depreciation expenses for 3 year =402,542.23-67,103.79*16.67=55,917.58

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