Question

Concord Industries presents you with the following information. Complete the table for the year ended December 31, 2022. The company depreciates all assets using the half-year convention. (Round answers to o decimal places, e.g. 45,892.) Accumulated Depreciation to 12/31/21 Cost Depreciation for 2022 Description Machine A Date Purchased 2/12/20 B/15/19 7/21/18 Depreciation Method (a) SYD $150,000 $35,090 (b) 30,450 (0) (0) Salvage Life Value in Years $16,900 10 22,0505 23,5008 72,4505 Machine B Machinec Machine D DDB (e) 67,200 229,950 (9) SYD 73,500 (h)

Answer 1

Sol:

Answers are depicted in the following table and their working notes are given in the attached images.

Description	Date Purchased	Cost	Salvage Value	Life in Years	Depreciation Method	Accumulated Depreciation to 12/31/18	Depreciation for 2019
Machine A	02-12-20	$ 150,000.00	$      16,900.00	10	(a) SYD	$                                                          35,090.00	(b) $   20,570
Machine B	8/15/19	(c) $ 82,950	$      22,050.00	5	SL	$                                                          30,450.00	(d)   $   12,180
Machine C	7/21/18	$    67,200.00	$      23,500.00	8	DDB	(e)                $ 42,394	(f)      $   1,306
Machine D	(g) Middle of 2020	$    22,950.00	$      72,450.00	5	SYD	$                                                          73,500.00	(h)      $ 36,750

Answer :- a Cost of Machine A = $150,000 Purchase clate o 12-Feb-2020 Salvage Value = $ 16,900 Depreciable cost = $ 150,000 - $ 16900 = 133,100 Life of asset = 10 years Accumulated clepreciation Upto 31-Dec-2001 = $ 35090 Let's use Convention Sum of year Digit method using half year. to calculate depreciation Hall year depreciation for 2020 = Depreciable cost x Reasotining te 1 Sum of years digits. = 133,100 x 10 ton half year = 24200 = 412100 Depreciation uplo 30-Jun-2021 = '33100 x 10 for balty.com 55 = 24200_$12100 Depreciation upto 31-Dec-2021 = 133,100 x 9 for half yea 55 = 21730 - $10390 So, the Accumulated Depreciation oplo 31-Dec-2001 = $ 12100 + $ 10100 + $ 10890 - $35090 - So, the method is Sum of years Dights method

Depreciation of Machine A fou 2022 30-Jun-2022 = Depreciation Uplo 33,100x9 for balfyear 55 =421730 = $ 10890 Depreciation upto 31-Dec-2022 = 133.100x8 for bay yoon = $19360 = $9680 Hence, Depreciation ofon Machine A for 2022 = $ 10890 + $ 9680 = Q 00570 Cost of Machine B Purchase date = 15- Aug - 2019 Salvage Value - $ 22,050 Life = 5 Years. Accumulated depreciation using Stonight-line method upto 31-Dec-2021 = $ 30450 Ansual depreciation = $ 30450 - 2.5 years = $ 12,180 Depreciable cost = 12180 x 5 = $60900 Hence, Cost of machine - Depreciable cost + salvage Value a $ 60,900 + $ 200so 1980950

Depreciation el Machine B Undert Straighl-lije method for the year 2002 - Cost of machine - Salvage value. Life of machine 4 32950 - $22050 = $cogoo $ 12,180 e Coslo the machine = $ 67,200 Salvage Value = $ 23,00 Purchase date = a1-Jul-2013 life = 8 years. Depreciation method = Double declining balance method Depreciation for the year 2018 (Half yean Convention = 67.000 x 2 for half year = 16800 = $ 8400 Depreciation upto 30-Jun-2019 = 67200 x 2 for balf years - = 16800 - 98400 Depreciation Uplo El- Dec-2019 = 67200 -16800 x 2 for ball learn = 12600 = $6300 Depretiation uplo 30-Jun.-2020 - G7200- 16300 = 6300 for baltye Depreciation uplo 31-Dec-2020 = 50400 - 12600 = $ 4125

Depreciation upto 30-Jun-2001 = 50400 - 1Q600 = $ 4725 Depreciation upto 31-12 - 2001 - 31800 - 94.50 8 = 3544 35 43.75 = $3544 (rounded) So accumulated depreciation of Machine c uplo 0001 = $8400+ 3400 + $ 6300+ $6300+ $4725+ $4725 + $ 3544 -$42394 Book Value of Machone cas on 1-Jan - 2002 - = $ 67000 - 42,394 = $ 24,806 Salyage value = $23.500 Depreciation for there the year 2002 = 24,806 - 23,500 =$1306

Date Pogo (9) Cost of machine = 2,295 $229,950 $ 72,450 Salvage Value 5 years Accumulated deprecatons 73,500 Depreciation method = Sum of year's DigH matbord Depreciable Cost = 2,29,950 - 72450 = $ 157,500 Since the the purchase dale is Dol given and clepreciation is based on hal year Convention. Depreciation for the first half yean = 157500x5 for half year T5 = 52500 - $ 24,250 Depreciation for the for half year Second half year = 157500 x 5 = Bosoo $26,250 Depreciation for the thind half year = 157500, 4 for halflyer = 42000 15 = $ a1000 Total accumulateel depreciation = $26,2 SO +$260504 $200 - = $ 73500 So the purchase date should be in the middle of year doao

СЬ) Depreciation upto dation upto 30 gun - 2099 = 157500x4 fon ball year 30 Jun - 20 1 5 = 42000 - $ 21,000 Depreciation upto 31-Dec-2022 & 157500 x 3 for half year - 31506, 915950 Depreciation for 2002 = $ 21000 + $ 15750 = $36750 IS