Answer:
1) Straightline $ 2000
2) Double-Declining-Balance $ 4000
3) Units of Production $ 2000
Explanation:
Cost of equipment $43,000
Residual value of equipment $3,000
Useful life of equipment 5 years
Formula:
1) Straight Line Method Depreciation = Cost - Salvage Value/ Useful Life
Straight Line Method Depreciation = $43,000 -$3,000/5=$ 8000
The amount of depreciation using Straight Line Method Depreciation for the year ended December 31, 2013, is
($ 8000/12)*3= $ 2000
The straight Line depreciation expense for 3 months is $ 2000
2) Straight Line Rate= 100%
Useful Life= 100%/5 = 20%
Double Declining Method = 2 * Straight Line Rate
Double Declining Method = 2 * Straight Line Rate= 2*20%= 40%
Year Book Value Dep Dep Accu. Book
Rate Expense Dep. Value
1 40,000 40 16000 16000 24000
Depreciation Expense for the whole year would be $ 16000.
Depreciation expense using double declining method for 3 months would be = ($ 16000/12 )*3= $ 4000
3) Depreciation per unit= (Cost -Salvage value) / Total units of production
Depreciation per unit= $43,000 -$3,000/20,000=40,000/20,000=2
Depreciation Expense = Depreciation per unit * No of Units Produced
Depreciation Expense = 2*1000= $ 2000
Depreciation Expense using Units of Production method would be $ 2000 for 3 months. i.e on 31st Oct 2013
