Question

Swifty Company purchases equipment on January 1, Year 1, at a cost of $486,000. The asset is expected to have a service life of 12 years and a salvage value of $43,740.

(a) Your answer is correct. Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to 0 decimal places, e.g. 5,125.) Depreciation for Year 1 $enter a dollar amount rounded to 0 decimal places Depreciation for Year 2 $enter a dollar amount rounded to 0 decimal places Depreciation for Year 3 $enter a dollar amount rounded to 0 decimal places SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 3 used

(b) Your answer is correct. Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years'-digits method. Depreciation for Year 1 $enter a dollar amount Depreciation for Year 2 $enter a dollar amount Depreciation for Year 3 $enter a dollar amount SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 1 of 3 used

(c) Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (Round depreciation rate to 2 decimal places, e.g. 15.84%. Round answers to 0 decimal places, e.g. 45,892.) Depreciation for Year 1 $enter a dollar amount rounded to 0 decimal places Depreciation for Year 2 $enter a dollar amount rounded to 0 decimal places Depreciation for Year 3 $enter a dollar amount rounded to 0 decimal places

Answer 1

a
Depreciation for Year 1	36855	=(486000-43740)/12
Depreciation for Year 2	36855	=(486000-43740)/12
Depreciation for Year 3	36855	=(486000-43740)/12
b
Sum-of-the-years'-digits	78	=12*(12+1)/2
Depreciation for Year 1	68040	=(486000-43740)/78*12
Depreciation for Year 2	62370	=(486000-43740)/78*11
Depreciation for Year 3	56700	=(486000-43740)/78*10
c
Depreciation rate	16.67%	=1/12*2
Depreciation for Year 1	81016	=486000*16.67%
Depreciation for Year 2	67511	=(486000-81016)*16.67%
Depreciation for Year 3	56257	=(486000-81016-67511)*16.67%