Question

Exercise 11-09 Presented below is information related to Sunland Manufacturing Corporation. Asset Cost Estimated Salvage Estimated Life (in years) A $41,600 $5,900 10 B 34,000 4,300 9 C 36,500 4,100 9 D 19,800 2,300 7 E 24,400 3,100 6 Your answer is incorrect. Try again. Compute the rate of depreciation per year to be applied to the plant assets under the composite method. (Round answer to 2 decimal place, e.g. 4.83%.) Composite rate enter the composite rate in percentages rounded to 2 decimal places % SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Prepare the adjusting entry necessary at the end of the year to record depreciation for the year. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Use Plant Assets related account.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Answer 1

Requirement 1

Composite rate of Depreciation =

12.09%

Requirement 2

Entry for depreciation

Depreciation Expense-Plant Asset	$      16,520.00
Accumulated Depreciation-Plant Asset		$    16,520.00
(Depreciation charged @12.09% on composite Assets)

Working

Assets	Original Cost	Salvage Value	Depreciable value	Depreciable Life	SL Depreciation per Year
A	$      41,600.00	$      5,900.00	$       35,700.00	10	$      3,570.00
B	$      34,000.00	$      4,300.00	$       29,700.00	9	$      3,300.00
C	$      36,500.00	$      4,100.00	$       32,400.00	9	$      3,600.00
D	$      19,800.00	$      2,300.00	$       17,500.00	7	$      2,500.00
E	$      24,400.00	$      3,100.00	$       21,300.00	6	$      3,550.00
Total	$    156,300.00	$    19,700.00	$     136,600.00	-	$    16,520.00

.

Composite rate of Depreciation =	Total Depreciation per year/Total Original Cost
	(16520/136600)
Composite rate of Depreciation =	12.09%