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(a)

Monty Company purchased a new plant asset on April 1, 2017, at a cost of $739,440. It was estimated to have a service life of 20 years and a salvage value of $62,400. Monty’s accounting period is the calendar year.

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(a)

Compute the depreciation for this asset for 2017 and 2018 using the sum-of-the-years'-digits method. (Round answers to 0 decimal places, e.g. 45,892.)
Depreciation for 2017 $

Depreciation for 2018 $

Compute the depreciation for this asset for 2017 and 2018 using the double-declining-balance method. (Round answers to 0 decimal places, e.g. 45,892.)
Depreciation for 2017 $

Depreciation for 2018 $

Explanation / Answer

Ans: Sum of Years = 210

        Depreciation for 2017 will be for 9 months

So,Depreciation for 2017 = (739440-62400)x20/210x9/12 months

                                    = $ 48,360

So,Depreciation for 2018 = (739440-62400)x20/210x3/12 months+(739440-62400)x19/210x9/12 months

                                    = $ 62,062

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