Sum of year digits method

Q.14(B):
Solution:
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 𝑐𝑜𝑠𝑡 − 𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 560,000 − 60,000
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 500,000
1+2+3+4+5=15
5 4 3 2 1
Dep rate = , , , ,
15 15 15 15 15

Schedule of Depreciation
Years Cost Dep Depreciation Expense Accumulated Book
rate depreciation value
1 560,000 5/15 500,000×5/15=166,667 166,667 393,333
2 560,000 4/15 500,000×4/15=133,333 300,000 260,000
3 560,000 3/15 500,000×3/15=100,000 400,000 160,000
4 560,000 2/15 500,000×2/15=66,667 466,667 93,333
5 560,000 1/15 500,000×1/15=33,333 500,000 60,000

Q.15(B):
Solution:
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 𝑐𝑜𝑠𝑡 − 𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 50,000 − 5,000
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 45,000
1+2+3+4+5=15
5 4 3 2 1
Dep rate = , , , ,
15 15 15 15 15

Schedule of Depreciation
Years Cost Dep Depreciation Expense Accumulated Book
rate depreciation value
1 50,000 5/15 45,000×5/15=15000 15000 35000
2 50,000 4/15 45,000×4/15=12000 27000 23000
3 50,000 3/15 45,000×3/15=9000 36000 14000
4 50,000 2/15 45,000×2/15=6000 42000 8000
5 50,000 1/15 45,000×1/15=3000 45000 5000
 Sum of year digits method
Q.16(A):
Solution:
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 𝑐𝑜𝑠𝑡 − 𝑟𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑣𝑎𝑙𝑢𝑒
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 82,000 − 2,000
𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 = 80,000
1+2+3+4+5+6+7+8+9+10=55
10 9 8 7 6 5 4 3 2 1
Dep rate = , , , , , , , , ,
55 55 55 55 55 55 55 55 55 55

Schedule of Depreciation
Years Cost Dep Depreciation Expense Accumulated Book
rate depreciation value
1 82,000 10 10 14545 67455
80,000× =14545
55 55

2 82,000 9 9 27635 54365

80,000× =13090
55 55