Following the depreciation example on page 7-6 of the VLN, determine 150% declining balance year 2 depreciation expense?____________ Alternative Depreciation MethodsStraight-line (SL)Depreciation expense = Cost – Residual valueLife in yearsDeclining-balance (DB) or Accelerated method. (200%maximum Declining rate, if the declining rate is 200% it iscalled Double Declining Balance)DB Depreciation Rate = Declining rateLife in yearsDepreciation expense = DB Depreciation Rate x Beginningof the year Book ValueDepreciation expenseAccumulated depreciation)DB Depreciation Rate x (Cost -Activity-Based (Units of Production)Cost - Residual valueLife in unitsDepreciation rate per unit =productionDepreciation expense = Depreciation rate per unit x Unitsof production for the yearPracticeA new stamping machine was purchased at a cost of $125,000.The estimated residual value is $20,000, and the estimateduseful life is 3 years. The estimated productive life of themachine is 150,000 units.Determine the following for Straight line DepreciationCostRVDepreciable costLifeYear 1Depreciation expenseAccumulated depreciationBook valueYear 2Depreciation expenseAccumulated depreciationBook valueYear 3Depreciation expenseAccumulated depreciationBook value Determine the following table for 150% Declining BalanceDepreciationCostRVDepreciable costLifeYear 1Depreciation expenseAccumulated depreciationBook valueYear 2Depreciation expenseAccumulated depreciationBook valueYear 3Depreciation expenseAccumulated depreciationBook valueDetermine the following for Activity-Based (Units ofProduction) DepreciationCostRVDepreciable costLifeYear Units made52,000 units50,000 units48,000 unitsYear 1Depreciation expenseAccumulated depreciationBook valueYear 2Depreciation expenseAccumulated depreciationBook valueYear 3Depreciation expenseAccumulated depreciationBook value

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Description: Following the depreciation example on page 7-6 of the VLN, determine 150% declining balance year 2 depreciation expense?____________ Alternative Depreciation MethodsStraight-line (SL)Depreciation expense = Cost – Residual valueLife in yearsDeclining-

Solution Concept Under the 150% declining balance method Depreciation rate =1/ useful…

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Business

Accounting

Following the depreciation example on page 7-6 of the VLN, determine 150% declining balance year 2 depreciation expense?____________

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets

Section19.5: Declining-balance Method Of Depreciation

Problem 1OYO

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