[lara12]

hi I need assistance with this question.. On July 1,1995 marcus purchased a building for 140,000 that has an established salvage value of 8,000 and an expected useful life of ten years. Note: partial your depreciation calcuations are required. Depriciate it for half a year as well.

[pready]

For Straight Line you take the Cost - Salvage Value = Depreciation Base / # of years = Depreciation Expense for year.

$140,000-$8,000=$132,000/10=$13,200 per year

Partial year is computed by taking the cost per year*# of months needed/12 months

$13,200 * 6/12 =$6,600 for 6 months

for double declining balance you take 1/# of years * 100 * 2 to get the rate
1/10= .1* 100 =10% *2 = 20%

you then take the Beginning period Book Value *the Double Declining Rate of 20% to get the Depreciation Expense for the year. Beginning Book value - Depreciation Expense = Remaining Book Value

For Example: your year one Depreciation is computed as follows:
$140,000 * 20% * 6/12=$14,000 Depreciation Expense for 1995
Remaining Book Value is $140,000 - $14,000 = $126,000

for 1996 you would take $132,000* 20% = $26,400 for Depreciation Expense
for each of the following years use the same format.