Enter the following questions Part I & II in the excel spreadsheet: Part I: Usin

Question

Enter the following questions Part I & II in the excel spreadsheet:

Part I: Using the format in Table 8-A-5, compute units of service depreciation using the following assumptions:

Cost to be depreciated = $50,000

Salvage value = zero

Total units of service = 10,000

Units of service per year: year 1 = 2,200; Year 2 = 2,100; Year 3 = 2,300; Year 4 = 2200; Year 5 = 200

Part II: Using the same format, compute units of service depreciation using adjusted assumptions as follows:

Cost to be depreciated = $50,000

Salvage value = $5,000

Total units of service = 10,000

Units of service per year: Year1 = 2200; Year 2 = 2100; Year 3= 2300; Year 4 = 2,200; Year 5 = 200

Explanation / Answer

Pat I Cost to be depreciated                      50,000.00 Salvage value                                    -   Depreciable value                    50,000.00 Total units of service                    10,000.00 Depreciation per unit of service                               5.00 Units of Service Depreciation Year Cost ( to be depreciated) Units of service per Year Depreciation per unit Annual Depreciation Expense Accumulated depreciation Net Book Value Year 1                                         50,000                       2,200.00                     5.00                        11,000                     11,000                     39,000 Year 2                       2,100.00                     5.00                        10,500                     21,500                     28,500 Year 3                       2,300.00                     5.00                        11,500                     33,000                     17,000 Year 4                       2,200.00                     5.00                        11,000                     44,000                       6,000 Year 5                          200.00                     5.00                           1,000                     45,000                       5,000 Total Units                       9,000.00 Pat II Cost to be depreciated                      50,000.00 Salvage value                       5,000.00 Depreciable value                    45,000.00 Total units of service                    10,000.00 Depreciation per unit of service                               4.50 Units of Service Depreciation Year Cost ( to be depreciated) Units of service per Year Depreciation per unit Annual Depreciation Expense Accumulated depreciation Net Book Value Year 1                                         50,000                       2,200.00                     4.50                           9,900                       9,900                     40,100 Year 2                       2,100.00                     4.50                           9,450                     19,350                     30,650 Year 3                       2,300.00                     4.50                        10,350                     29,700                     20,300 Year 4                       2,200.00                     4.50                           9,900                     39,600                     10,400 Year 5                          200.00                     4.50                              900                     40,500                       9,500 Total Units                       9,000.00

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