ACCOUNTING DEPRECIATION QUESTION, URGENT HELP NEEDED!

Question

Calculating Depreciation 

 

 

**ABOUT FIXED ASSET**

COST:150,000

SALVAGE VALUE: 12,000

LIFE: 5 YEARS

UNITS OF OUTPUT: 138,000

 

UNITS OF OUTPUT IN YEARS 1-5

YEAR 1: 60,000

YEAR 2: 50,000

YEAR 3: 20,000

YEAR 4: 5,000

YEAR 5: 3,000

 

I NEED TO KNOW STRAIGHT LINE DEPRECIATION, UNITS OF OUTPUT, AND DOUBLE DECLINING BALANCE. IN ALL THREE FORMS, I NEED THE CALCULATIONS, ANNUAL DEPRECIATION, ACCUMULATED DEPRECIATION, AND BOOK VALUE FOR YEARS 1-5. THIS IS TO BE INPUTTED INTO AN EXCEL SHEET.

 

 

 

 

I AM REALLY IN NEED OF AN ANSWER BECAUSE I NEED TO USE THIS AS AN EXAMPLE TO TEACH MYSELF SO I CAN DO THE ACTUAL WORK TONIGHT. PLEASE HELP!  

Answer 1

STRAIGHT LINE DEPRECIATION

Annual Depreciation = (Cost - Salvage Value) / Life Annual Depreciation = (150,000 - 12,000) / 5 Annual Depreciation = 27,600

Year 1 Depreciation Expense = $27,600 Accumulated Depreciation = $27,600 Book Value = $122,400

Year 2 Depreciation Expense = $27,600 Accumulated Depreciation = $55,200 Book Value = $94,800

Year 3 Depreciation Expense = $27,600 Accumulated Depreciation = $82,800 Book Value = $67,200

Year 4 Depreciation Expense = $27,600 Accumulated Depreciation = $110,400 Book Value = $39,600

Year 5 Depreciation Expense = $27,600 Accumulated Depreciation = $138,000 Book Value = $12,000

UNITS OF OUTPUT METHOD

Annual Depreciation per unit = (Cost - Salvage Value) / Units of Output Annual Depreciation per unit = (150,000 - 12,000) / 138,000 Annual Depreciation per unit = $1.01

Year 1 Depreciation Expense = $1.01 x 60,000 units = $60,600 Accumulated Depreciation = $60,600 Book Value = $89,400

Year 2 Depreciation Expense = $1.01 x 50,000 units = $50,500 Accumulated Depreciation = $111,100 Book Value = $78,900

Year 3 Depreciation Expense = $1.01 x 20,000 units = $20,200 Accumulated Depreciation = $131,300 Book Value = $48,700

Year 4 Depreciation Expense = $1.01 x 5,000 units = $5,050 Accumulated Depreciation = $136,350 Book Value = $43,650

Year 5 Depreciation Expense = $1.01 x 3,000 units = $3,030 Accumulated Depreciation = $139,380 Book Value = $39,620

DOUBLE DECLINING BALANCE METHOD

Depreciation Rate = 2 / Life Depreciation Rate = 2 / 5 Depreciation Rate = 0.4 or 40%

Year 1 Depreciation Expense = $150,000 x 40% = $60,000 Accumulated Depreciation = $60,000 Book Value = $90,000

Year 2 Depreciation Expense = $90,000 x 40% = $36,000 Accumulated Depreciation = $96,000 Book Value = $54,000

Year 3 Depreciation Expense = $54,000 x 40% = $21,600 Accumulated Depreciation = $117,600 Book Value = $32,400

Year 4 Depreciation Expense = $32,400 x 40% = $12,960 Accumulated Depreciation = $130,560 Book Value = $19,440

Year 5 Depreciation Expense = $19,440 x 40% = $7,776 Accumulated Depreciation =

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Answer 2

Book Value is generally :  Asset cost less accumulated Depreciation 

  

What is the factor for Double Declining Balance .. is it 200% .. ?  .. assumption is 200%

 

 

Use Microsoft Excel Financial formulas for calculations :

straight-line Depreciation : SLN

double declining balance Depreciation : DDB

 

 

Units of Output Depreciation :  

 

Your Question does not define :  Units of Output: 138,000 

 

 

more information is required to answer

 .. 

 

 

 

Answer 3

Straight Line Depreciation = Cost - Salvage divided by years of useful life. In this example $150,000 -12,000 = 138,000 / 5 is $27,600

 

Double Declining Balance Depreciation = Cost x Straight Line percent times 2 x Book value (beginning of each yr). In this example, Cost $150,000 x (SL of 20% x 2) or 40% is $60,000.

 

Units of Output Depreciation = Cost - Salvage divided by TOTAL units produced x number of units/year. In this example, $150,000-12,000=138,000 / 138,000 units = $1.00 worth of depreciation per unit. So year 1 depreciation is $1.00 / unit x 60,000 units produced = $60,000.

 

Accumluated depreciation would be to add each years depreciation together.

 

Book Value would be Starting cost $150,000 - yr 1 depreciation (whichever method used) = Book Value end of year one and beginning Book Value yr 2 and so on.

 

The definitions and calcuations can be obtained on an internet search as well.

 

Hope this helps.