Respuesta :
Answer:
The calculations are shown below
Explanation:
The computations are shown below:
a) Straight-line method:
= (Original cost - residual value) ÷ (useful life)
= ($72,000 - 4,500) ÷ (3 years)
= ($67,500) ÷ (3 years)
= $22,500
In this method, the depreciation is same for all the remaining useful life
So for year 1, year 2 and year 3,the depreciation expense for $22,500 each is charged every year
(b) Units-of-production method:
= (Original cost - residual value) ÷ (estimated production hours)
= ($72,000 - 4,500) ÷ (18,000)
= ($67,500) ÷ (18,000)
= $3.75
For first year, it would be
= Production hours in first year × depreciation per hours
= 7,600 hours × $3.75
= $28,500
Now for the second year, it would be
= Production hours in second year × depreciation per hours
= 6,000 hours × $3.75
= $22,500
And for third year, it would be
= Production hours in third year × depreciation per hours
= 4,400 hours × $3.75
= $16,500
(b) Double-declining balance method:
First we have to find the depreciation rate which is shown below:
= One ÷ useful life
= 100 ÷ 3
= 33.33%
Now the rate is double So, 66.67%
In year 1, the original cost is $72,000, so the depreciation is $48,000 after applying the 66.67% depreciation rate
And, in year 2, the depreciation expense is
= ($72,000 - $48,000) × 66.67%
= $16,000
And, for year 3, it would be
= $67,500 - $64,000
= $3,500
The $64,000 is come from
= $48,000 + $16,000
