Question

S9-4 Computing second-year depreciation and accumulated depreciation On January 1, 2018, Advanced Airline purchased a used airplane at a cost of $60,500,000. Advanced Airline expects the plane to remain useful for eight years (5,000,000 miles) and to have a residual value of $5,500,000. Advanced Airline expects the plane to be flown 1,100,000 miles the first year and 1,200,000 miles the second year.

Answer 1

Answer- Gwen data, - cost = $ 60,000,000 Byeay Con 5,000,0x0 miles usefuife residual value $5,500,000 cost - Wadual value a) depreclcrtion expense pou onnurn as por straught line method = ushes life of years $60,500,000 --- $5,509000 = $6875,000 per annum pense is same for AS por Strought line methol, depreciation years all useful life of aard, $6875000 i 2012 depreciation expense for 2019 = (bi Units of production:- / cost - Teraclualvalad Current year 9xAeteral miles deip depreciation expense - estimated Total miles x 1,600,000 $60, 500,000 - Pysy $1000000 .: FO Fixt year deprecation (2018) = $ 12,100,000 ($60,500,000 - $5500,000 x 1200,000 "second yeon (10%) depreciation = Ç000,000 $ 13,200,000

© Double- declining balance method - L XLOO useful life depreciation rate as per straight line method = 4x100 = 12.506 rare of double-declinmg balance = ax 12.5.4. = 25.6 : year I (2018) depreciation = $60, 500,000 X 2506 = $ 15,125,000 year 2 (2019) depreciation = $60,500,000 - $15,125.000)*250% = $11,343,750 calculation of balance of accumulated depreciation Setas straught line method year depreciation expense accumulated depreciation $6875,000 $6875,000 $ 6,875,000 $ 13,750,000

Units of production methode yea depreciation, expense accumulated depredation $ 100,000 $ 12.,100,000 $ 13,200,000 $25,300,000 double declining balance method :- yra) depreciation Expense accumulaled depreciation $ 65,125000 $ 15,125000 $26468, 750 2 $ 11,343,750 Ex= Thanks