ACT 201

Assignment

E10-6

a) Straight-line is (cost-salvage)/years
(150000 - 12000)/5 = 27600 per year
2014 Depreciation = 27600 X 3/12
= 6900 dollars

b) Units of activity method:

(150000-12000)/10000 = 13.80 per hour
2014 depreciation = 1700 hours X 13.80 = 23460

c) Declining balance method:

2014 depreciation = 150000 X 40% X 3/12 = 15000
Book value January 1, 2015 = 150,000 – 15,000 = 135000.
2015 depreciation = 135,000 X 40% = 54,000

E10-7
a) (1) 2014: (34000 – 2,000)/8 = 4000
2015: (34000 – 2000)/8 = 4000
(2) (34,000 – 2,000)/100000 = 0.32 per mile
2014: 15,000 X 0.32 = 4800
2015: 12,000 X 0.32 = 3840
(3) 2014: 34000 X 25% = 8500
2015: (34000 – 8500) X 25% = 6375