Q Search the web de Chrome week 1Practi GChegg Study Guilt

Q Search the web. de Chrome week 1:Practi! × GChegg Study | Guilt) MHE esock , proe leicheggcom e laeggcom |Glaeggoom eek 1: Practice Problems Help Sav 2 On January 4, 2019, Columbus Comparny purchased new equipment for $633,000 that had a useful life of four years and a salvage value of $43,000 Required: Prepare a schedule showing the annual depreciation and end-of-year accumulated depreciation for the first three years of the asset\'s Ife under the straight line method, the sum-of the-years-digits method, and the double-declining-balance method Analyze: t the double-decining balance method ts used to compute depreciation, what would be the Book value of the asset at the end of 2020? Complete this question by entering your answers in the tabs below Sum of Year Double Digits DediaingAnae Straight Lite g balance method is used to compute depreciation, what would be the book value of the asset at the end of 20207 4 5 6 8 9

Solution

Straight line method of depreciation:

[Cost of the asset – salvage value]/Number of useful life

[$633,000 - $43000]/4 = $147,500

Sum of years digit method:

Depreciation:

[$633000-$43000]*4/12 = $590000*4/10 = $236,000

Double declining method:

Depreciation rate = 100/4 = 25%

Double declining rate = 2*25% = 50%

Book value at the beginning of 2019 =$633,000

Depreciation for the year 2019 = $633,000*50% = 316,500

If the double declining balance method is used to compute depreciation, what would be the book value of asset at the end of 2020?

Depreciation rate = 100/4 = 25%

Double declining rate = 2*25% = 50%

Book value at the beginning of 2019 =$633,000

Depreciation for the year 2019 = $633,000*50% = 316,500

Depreciation for the year 2020 = $316,500*50% = $158,250

Book Value at the end of 2020 = $316500-$158250 = $158250