Scribd
Upload
85 views

Problem 28 - answer key

Uploaded by

Hanie Iguid
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
85 views

Problem 28 - answer key

Uploaded by

Hanie Iguid
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Problem 28-4

Asset Cost Residual value Depreciable Useful life in Annual


amount years depreciation
Building 6,500,000 500,000 6,000,000 15 400,000
Machinery 2,350,000 350,000 2,000,000 5 400,000
Equipment 1,150,000 150,000 1,000,000 10 100,000
10,000,000 1,000,000 9,000,000 500,000

A. Composite depreciation rate


Annual depreciation 500,000
Divided by Total cost 10,000,000
Composite depreciation rate 5%

B. Composite life
Depreciable amount 9,000,000
Divided by total annual depreciation 500,000
Composite life 18 years

C. For the current year


Dec. 31 Depreciation (10,000,000 x 5%) 500,000
Accumulated depreciation 500,000
Annual depreciation

D. Retirement of machinery

Dec. 31 Cash 100,000


Accumulated depreciation 2,250,000
Machinery 2,350,000
Retirement of machinery at the end of fifth year

E.
Total cost 10,000,000
Cost of equipment retired 2,350,000
Remaining cost 7,650,000

Annual depreciation starting 6th year (7,650,000 x 5%) 382,500

Dec. 31 Depreciation 382,500


Accumulated depreciation 382,500
Annual depreciation

Problem 28-5
1.
Cost 7,500,000
Less: Depreciation (7,500,000/10 x 9/12) - 2017 562,500
Carrying amount - Jan. 1, 2018 6,937,500
Less: Accumulated depreciation (7,500,000/10 x 6) - 2023 4,500,000
Carrying amount - Dec. 31, 2023 2,437,500

2.
Annual depreciation (1,200,000/6 x 3/12) 50,000
Cost 1,200,000
Less: Accumulated depreciation (50,000 x 6) 300,000
Carrying amount - April 1, 2023 900,000

3.
Cost 2,000,000
Less: Residual value 400,000
Depreciable amount 1,600,000

Annual depreciation (1,600,000/4 x 9/12) 300,000

Cost 2,000,000
Less: Accumulated depreciation (300,000 x 6) 1,800,000
Carrying amount - Dec. 31, 2023 200,000

4.
Depreciation for main milling machine - 2023 750,000
Depreciation for first special component - 2023 50,000
Depreciation for second special component - 2023 300,000
Total depreciation - Dec. 31, 2023 1,100,000

Problem 28-6
Asset Cost Residual value Depreciable Useful life in Annual
amount years depreciation
Machine A 550,000 50,000 500,000 20 25,000
Machine B 200,000 20,000 180,000 15 12,000
Machine C 40,000 - 40,000 5 8,000
790,000 720,000 45,000

Depreciable amount 720,000


Divided by total annual depreciation 45,000
Composite life 16 Years

You might also like