(NijuNi) Can you help me with this problem? Answers need only in blue box. a new
ID: 2596156 • Letter: #
Question
(NijuNi) Can you help me with this problem? Answers need only in blue box. a new computer system on January 1. 2018, for $40,000. It is expected to have a five-year useful life and a $5,000 salvage value. Becker Ofice Service expects to use the computer system more extensively in the early years of its life. Required a. Calculate the depreciation expense for each of the five years, assuming the use of stralght-line depreciation Year Cost Salvage Value Useful Annual Depreciation Life 1 40,000 15,000 S 7,000 per year $ 7,000 S 7.000 $ 7.000Explanation / Answer
b)
d. Gain or loss under both methods of depreciation:
Straight line book value at end of 4th year = 40000-28000 = 12000
Gain on sale = 15000-12000
= $3000
Double declining balance method
Book value at end of 4th year = $5,184
gain on sale = 15000-5184
= $9,816
The answer should be 9816 not 8644.
Year Cost Beginning of period 2*SL rate Annual depreciation Book value 1 $40,000 20% 0.4 $16,000 $24,000 2 $24,000 20% 0.4 $9,600 $14,400 3 $14,400 20% 0.4 $5,760 $8,640 4 $8,640 20% 0.4 $3,456 $5,184 5 $5,184 20% 0.4 $2,074 $3,110.40Related Questions
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