Question

8 Compa hy be ught and staxt to use. Ci Sse escet asset was coshnIsC0o,with an esitimateals 5 oc o hours?// Yeg a 1..-3 coe ho.uXS/.year 7ooo, Compare the results a the n the hles thion yemethod. I thEll, pre ciaboh- method?.hy Ell i Sthaighu line methed preciaboh Do Depreciation

please solve this in straight line method,sum of the year nd performance related method

Answer 1

Straight Line method of Depreciation	in $
Cost of the asset	150000
Salvage Value	30000
Estimated life of the asset	2 years
Depreciation per annum =	Cost of the asset (-) Scrap Value
	Estimated life of the asset
=	150000-30000
	2
=	120000/2
=	60000 per annum
Year	Depreciation	Accumulated Deprecaition	Net Book Value
1	60,000	60000	150000-60000	90000
2	60000	120000	150000-120000	30000	Residual Value
Sum of Years Digits Method	in $
Cost of the asset	150000
Salvage Value	30000
Estimated life of the asset	2 years
Sum of Years Digits (SYD) =	n(n+1)/2
	Where n = estimated useful life
SYD =	2(2+1) / 2
=	3
Year	Balance of useful life at the begininning of the year	SYD	%	Annual Depreciation
1	2	2/3	66.67%	80004	(120000 x 66.67%)
2	1	1/3	33.33%	39996	(120000 x 33.33%)
			100.00%	120000	(150000-30000 Residual value)
Performance method of Depreciation	in $
Cost of the asset	150000
Salvage Value	30000
Estimated life of the asset	15000 Hours
(In Hours)
Depreciation per hour =	Cost of asset (-) Scrap Value
	No of Estimated life in hours
=	150000 (-) 30000
	15000 Hours
=	120000 /15000
Per hour rate of Depreciation=	8
Year	Depreciation	Accumulated Deprecaition	Net Book Value
	(No of Hours x Rate per Hour)
1	64,000	64000	150000-64000	86000
	(8000 x8)
2	56000	120000	150000-120000	30000	Residual Value
	(7000 x 8)