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Chapter 29

The document discusses depreciation methods including sum-of-years digits and declining balance. It provides examples of calculating depreciation expense for various assets using these methods over multiple years. The examples show how to determine the annual depreciation amount and calculate accumulated depreciation. They also demonstrate how changing the useful life or depreciation method impacts depreciation calculations.

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Darlianne Klyne Bayer
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53 views19 pages

Chapter 29

The document discusses depreciation methods including sum-of-years digits and declining balance. It provides examples of calculating depreciation expense for various assets using these methods over multiple years. The examples show how to determine the annual depreciation amount and calculate accumulated depreciation. They also demonstrate how changing the useful life or depreciation method impacts depreciation calculations.

Uploaded by

Darlianne Klyne Bayer
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Chapter 29:

DEPRECIATION
Sum of years' digits and declining balance
Changes in useful life and method
Solution:

SYD = 1+2+3+4+5+6+7+8 = 36

Cost 4,000,000

Accumulated Depreciation:

2022 (3,600,000×8/36) 800,000

2023 (3,600,000×7/36) 700,000 (1,500,000)

Carrying Amount- December 31, 2023 2,500,000


Solution:

SYD=1+2+3+4+5+6+7+8+9+10=55

Depreciable Cost (240,000/8/55) 1,650,000

Residual value 50,000

Total cost of the equipment 1,700,000


Solution:

SYD=1+2+3+4+5=15

Cost 3,300,000

Residual value (300,000)

Depreciable amount 3,000,000

2022 (5/15 × 3,000,000 = 1,000,000 × 9/12) 750,000

2023 (1,000,000 × 3/12) 250,000

(4/15 × 3,000,000 = 800,000 × 9/12) 600,000

2024 (800,000 × 3/12) 200,000

Accumulated Depreciation - 2024 1,800,000


Solution:

SYD= 1+2+3+4+5=15

2019 (5/15 x 900,000) 300,000

2020 (4/15 x 900,000) 240,000

2021 (3/15 x 900,000) 180,000

Accumulated Depreciation-Dec. 31, 2021 720,000

2022 depreciation (2/15 x 900,000) 120,000


Solution:

Straight Iine (100%/8 years) 12.5%

fixed rate (12.5%×2 years) 25%

2022 Depreciation (1,280,000×25%) 320,000

2011 Depreciation (1,280,000-320,000×25%) 240,000


Solution:

Straight line rate (100%/8 years) 12.5%

Double declining rate (12.5% x 2) 25%

Carrying amount - January 1, 2022 (900,000/25%) 3,600,000

Acquisition cost - January 1, 2023 (3,600,000/75%) 4,800,000


Solution:

1.SYD=1+2+3+4=10

2022 Depreciation (4/10×4,000,000) 1,600,000

2023 Depreciation (3/10×4,000,000) 1,200,000

Accumulated Depreciation - 2023 2,800,000

2. Acquisition cost 4,500,000

Less: Accumulated Depreciation

2022 (4/10 x 4,000,000) 1,600,000

2023 (3/10 x 4,000,000) 1,200,000 (2,800,000)

Carrying amount, Dec. 31, 2011 1,700,000


Solution:

Straight line rate (100%/10 years) 10%

Fixed rate (10% x 2) 20%

2022 Depreciation (5,000,000 x 20% x ½) 500,000

2023 Depreciation (5,000,000-500,000 x 20%) 900,000


Solution:

Straight line rate (100%/10 years) 10%

Fixed rate (10% x 2) 20%

2022 Depreciation (5,000,000 x 20% x ½) 500,000

2023 Depreciation (5,000,000-500,000 x 20%) 900,000


Solution:

Straight line rate (100%/10 years) 10%

Fixed rate (10% x 2) 20%

2022 Depreciation (5,000,000 x 20% x ½) 500,000

2023 Depreciation (5,000,000-500,000 x 20%) 900,000

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