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Submitted By shenyw

Words 250

Pages 1

Words 250

Pages 1

1. Straight-line method

Deprecation per year (36000-6000)/10=3000

The depreciation expense for 2006 is $3,000. The book value at the end of 2006 is $33,000.

The depreciation expense for 2007 is $3,000. The book value at the end of 2007 is $30,000.

2. Double declining balance method

Declining rate is 1/10*2=20%

Year Depreciation Expense Book Value 36,000

2006 20% 7,200 28,800

2007 20% 5,760 23,040

3. Sum of the years’ digits method

Depreciation base is 30,000

Year SYD Fraction Depreciation Expense Book Value 36,000

2006 10/55 5,454.55 30,545.45

2007 9/55 4,909.09 25,636.36

4. Units of production method

Depreciation expense in 2006 is (36,000-6,000)*(25,000/500,000)=1,500. The book value at the end of 2006 is 34,500.

Depreciation expense in 2007 is (36,000-6,000)*(84,000/500,000)=5040. The book value at the end of 2007 is 29,460.

PART II

1.

Date Amount Weight AAE

2/1/11 1,050,000 11/12 962,500

3/31/11 900,000 9/12 675,000

6/1/11 750,000 7/12 437,500

10/1/11 1,000,000 3/12 250,000 3,700,000 2,325,000

The accumulated average expenditure in 2011 is $2,325,000.

2. Since AAE is less than the specific borrowing…...

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Words: 5245 - Pages: 21