At the beginning of the Current year, Phoenix Company acquire an item of machinery for 160,000. The machinery has a life expectancy of four years and an estimated salvage value of 16,000.


Straight-line method
I came up with
year depreciation expense Accumulated deper. Book value
1 36,000 36,000 124,000
2 36,000 72,000 88,000
3 36,000 108,000 52,000
4 36,000 144,000 16,000
5 36,000 180,000 20,000

For the double declining-balance method
year depreciation expense Accumulated depreiciation book value
1 64,000 64,000 96,000
2 38,400 102,400 25,600
3 25,600 35840 40,080
4 12,800 140,800 12,800
5

I need help with the double- declining balance method.

Use the data from up above and assume that the machinery was purchaed on OCt. 1 of the first year. Perpared depreciation schedules for the life of the asset using (a) the straight-line method; (b) the double declinning balance method.

(a)
year depreciation expense Accumulated depreciation book value
1
2
3
4
5
6

(b) double declining-balance method

year depreciation expense Accumulated depreciation book value
1
2
3
4
5

Oct 5 Installed new wiring throughout the building at a cost of 30,000. It is expected that the life of the building will extended as a result.

Oct 6 Sold a old truck with the cost of 11,000 and accumulated deperciation prior to the current year of 9,000 for 1000. Depreciation has been recorded thr rate of 1,800 a year but has not yet been recorded for 20xx.

Oct 10 Traded in old office equipment for new office equipment listing at 3,200. The cost of the old equipment was 3,000, and the accumulated depreciation through the date of trade was 200. Received a 2,900 traded-in allowance and paid the balance in cash. The accounting method is used.

Oct 17 Purchased for cash a fax machine for the office. The list price was 790, but a 15% traded discount was received.


Oct 31 Recorded depreciation on the truck purchased on Aug 4. The units-of-production method is used. The truck has a useful life of 50,000 miles and a salvage value of 2,000. It was driven 1,100 miles in August.

At the beginning of the Current year, Phoenix Company acquire an item of machinery for 160,000. The machinery has a life expectancy of four years and an estimated salvage value of 16,000.


160,000-16,000= 144,000/4= 36,000

a) straight-line amort.
Yr--Dep Exp---Acc. Amort----BV
1---36,000---36,000---124,000
2---36,000---72,000---88,000
3---36,000---108,000---52,000
4---36,000---144,000---16,000

b) DDB method
36,000/144,000 = .25 x 2 = 50%

Yr--Dep Exp---Acc. Amort----BV
1---80,000---80,000---80,000
2---40,000---120,000---40,000
3---20,000---140,000---20,000
4---4,000---144,000---16,000

Does your teacher want you to use the half-life rule at all?