Land

Account $
Purchase price of 3 acres of land 150,000
Delinquent real estate taxes on the land to be paid by Caramel 3,700
Total 153,700

Furniture
Account $
Furniture 123,500
Transportation of furniture from seller to building 1,100
Total 124,600
 Building
Account
Building permit for the apartment building
Architect’s fee for the design of the building
Materials used to construct the building
Labour to construct the building
Interest cost on construction loan for the building
Salary of construction supervisor (90% to building; 10% to parking lots & concrete Walkways
Total

Improvements
Account
Demolition & removal of old structure on property
Fence around the boundary of the property
Signs near the approaches to the property
Parking lots & concrete walkways on the property
Lights for the parking lots & walkways
Salary of construction supervisor (90% to building; 10% to parking lots & concrete Walkways
Landscaping (trees & shrubs)
Total
$
200
32,000
814,000
734,000
3,400
49,500
1633100

$
6,100
44,200
20,000
17,500
8,900
5,500
9,000
111,200
Straight Line Method

Depreciation for the year

Date Asset Cost Depreciation Cost Depreciation Derpreciation
$ $ Rate % Expense $
1/1/2012 42,000 0 0 0
12/31/2012 10,000 23.81 10,000
12/31/2013 10,000 23.81 10,000
12/31/2014 10,000 23.81 10,000
12/31/2015 10,000 23.81 10,000

Unit of Production Method

Depreciation for the year

Date Asset Cost Depreciation Cost Depreciation Derpreciation
$ $ Rate % Expense $
1/1/2012 42,000 0 0 0
12/31/2012 8,000 19.4 8,000
12/31/2013 12,000 28.57 12,000
12/31/2014 16,000 38.09 16,000
12/31/2015 4,000 9.52 4,000

Double Declining Method

Depreciation for the year

Date Asset Cost Depreciation Cost Depreciation Derpreciation
$ $ Rate % Expense $
1/1/2012 42,000 0 0 0
12/31/2012 21,000 50 21,000
12/31/2013 10,500 50 10,500
12/31/2014 5,250 50 5,250
12/31/2015 2,625 50 2,625
Accumulated Book
Depreciation $ Value $
0 42,000
10,000 32,000
20,000 22,000
30,000 12,000
40,000 2,000

Accumulated Book
Depreciation $ Value $
0 42,000
8,000 34,000
20,000 22,000
36,000 6,000
40,000 2,000

Accumulated Book
Depreciation $ Value $
0 42,000
21,000 21,000
31,500 10,500
36,750 5,250
39,375 2,625
Staight Line Method

Depreciation for the year

Date Asset Depreciation Depreciation Derpreciation Accumulated
Cost Cost Rate Expense Depreciation
01/01/20X2 360,000 0 0 0 0
01/31/20X2 66,800 18.55 66,800 66,800
01/31/20X3 66,800 18.55 66,800 133,600
01/31/20X4 66,800 18.55 66,800 200,400
01/31/20X5 66,800 18.55 66,800 267,200
01/31/20X6 66,800 18.55 66,800 334,000

Unit of Production Method

Depreciation for the year

Date Asset Depreciation Depreciation Derpreciation Accumulated
Cost $ Cost $ Rate % Expense $ Depreciation $
01/01/20X2 360,000 0 0 0 0
01/31/20X2 52,500 52,500 52,500
01/31/20X3 65,000 65,000 117,000
01/31/20X4 75,000 75,000 192,500
01/31/20X5 80,000 80,000 275,500
01/31/20X6 60,000 60,000 332,500

Double Declining Method

Depreciation for the year

Date Asset Depreciation Depreciation Derpreciation Accumulated
Cost Cost Rate Expense Depreciation
01/01/20X2 360,000 0 0 0 0
01/31/20X2 144,000 40 144,000 144,000
01/31/20X3 86,400 40 86,400 230,400
01/31/20X4 51,840 40 51,840 282,440
01/31/20X5 31,024 40 31,024 313,464
01/31/20X6 18,625.50 40 18625.5 332089.5
 Book
Value
360,000
293,200
226,400
159,600
92,800
26,000

Book
Value $
360,000
307,500
242,500
167,500
87,500
27,500

Book
Value
360,000
216,000
129,600
77,560
46,536
27,910.50
i) ii)
Genoural Journal
Date Account/ Explanation DR $ CR $ Date
4/1/2012 Equipment 270,000 12/31/2012
Cash 270,000 12/31/2013
Equipment bought 12/31/2014
12/31/2015

U
Date
12/31/2012
12/31/2013
12/31/2014
12/31/2015

D
Date
12/31/2012
12/31/2013
12/31/2014
12/31/2015
 iii)
Straight Line
Working Depreciation Expense $
(270,000-9,000÷3)×9/12 65,250
(270,000-9,000÷3)×12/12 87,000
(270,000-9,000÷3)×12/12 87,000
(270,000-9,000÷3)×12/12 87,000

Unit of Production
Working Depreciation Expense $
(270,000-9,000÷1800)×7500 108,750
(270,000-9,000÷1800)×5500 79,750
(270,000-9,000÷1800)×4000 58,000
(270,000-9,000÷1800)×1000 14,500

Double Declining
Working Depreciation Expense $
(270,000-0)×2/3×9/12 135,000
(270,000-135,000)×2/3×12/12 90,000
(270,000-225,000)×2/3×12/12 30,000
(270,000-255,000)×2/3×12/12 10,000
 Prudence Company
Balnace Sheet
For the year XXXX
Fixed Asset:
2012
Equipment 270,000
Less: Accumulated Depreciation 65,250
Net Book Value 204,750
2013
Equipment 270,000
Less: Accumulated Depreciation 152,250
Net Book Value 117,750
2014
Equipment 270,000
Less: Accumulated Depreciation 239,250
Net Book Value 30,750
i) ii) Annual Depreciation=
Genoural Journal Book Value = 130,000
Date Account/ Explanation DR $ CR $
01/01/20X5 Equipment 130,000
Cash 130,000 iii) Depreciation Expense
New machine

iv) Genoural Journal

Date Account/ Explanation DR $ CR $
Loss on disposal 1,200
Accumulated Depreciation 128,800
Cash 30,000
Equipment 130,000

v) Book Value after 2 Years= 80,600

Depreciation expense for 20X17= 80,600-8,000/6= 12,100
Annual Depreciation= 130,000-6,5000/5= 24,700
Book Value = 130,000-24,700= 105,300

Depreciation Expense= 130,000-52,000*2/5=72,800