Rembrandt Company acquired a plant asset at the beginning of

Rembrandt Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years\'-digits method, and (3) the double-declining-balance method. Year Straight-Line Sum-of-the- Years\'-Digits Double-Declining- Balance 1 $16,650 $27,750 $37,000 2 16,650 22,200 22,200 3 16,650 16,650 13,320 4 16,650 11,100 7,992 5 16,650 5,550 2,738 Total $83,250 $83,250 $83,250 Answer the following questions. (a) What is the cost of the asset being depreciated? (Round answer to 0 decimal places, e.g. 45,892.) Cost of asset $

Solution

Calculate cost of assets :

Depreciable base = 83250

but its not cost of assets.

in under double decling balance method cost is depreciated under 5 year so

Straight line rate = 100/5=20%

Double decline rate is = 20*2=40%

First year dep is 37000

So cost of assets is 37000*100/40 = $92,500