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    CHP 9

    Uploaded by

    Amblessed ONWuegbulem
    chapter nine of accounting and finance

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    CHP 9

    Uploaded by

    Amblessed ONWuegbulem
    4 views2 pages
    chapter nine of accounting and finance

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    chp9

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    © © All Rights Reserved

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    PDF, TXT or read online from Scribd

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    chapter nine of accounting and finance

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    4 views2 pages

    CHP 9

    Uploaded by

    Amblessed ONWuegbulem
    chapter nine of accounting and finance

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    a.

    (1) Straight-Line Schedule:


    Depreciation Accumulated Book
    Year Computation Expense Depreciation Value
    2012 $100,000 x 1/5 x 1/2 $10.000 $98.000
    $10.000
    2013 100,000 x 1/5 20.000 30.000 78.000
    2014 100,000 x 1/5 20.000 50.000 58.000
    2015 100,000 x 1/5 20.000 70.000 38.000
    2016 100,000 x 1/5 20.000 90.000 18.000
    2017 100,000 x 1/5 x 1/2 10.000 100.000 8.000

    (2) 200% Declining-Balance Schedule:


    Depreciation Accumulated Book
    Year Computation Expense Depreciation Value
    2012 $108,000 x 40% x 1/2 $21.600 $21.600 $86.400
    2013 86,400 x 40% 34.560 56.160 51.840
    2014 51,840 x 40% 20.736 76.896 31.104
    2015 31,104 x 40% 12.442 89.338 18.662
    2016 18,662 x 40% 7.465 96.803 11.197
    2017 100,000 – 96,803 3.197 100.000 8.000
    (3) 150% Declining-Balance Schedule:
    Depreciation Accumulated Book
    Year Computation Expense Depreciation Value
    2012 $108,000 x 30% x 1/2 $16.200 $16.200 $91.800
    2013 91,800 x 30% 27.540 43.740 64.260
    2014 64,260 x 30% 19.278 63.018 44.982
    2015 44,982 x 30% 13.495 76.513 31.487
    2016* ($31,487 – $8,000) ÷ 2 11.744 88.257 19.743
    yrs.
    2017* ($31,487 – $8,000) ÷ 2 11.743 100.000 8.000
    yrs.
    * Switch to straight-line
    b. Swanson & Hiller will probably use the straight-line method for financial
    reporting purposes, as this method results in the least amount of depreciation
    expense in the early years of the asset’s useful life.

    c. Computation of gains or losses upon disposal:

    1. Straight-Line

    Cash proceeds $ 29.000


    Book value on 12/31/15 (38.000)
    Loss on disposal $ (9.000)

    2. 200% Declining-Balance:

    Cash proceeds $ 29.000


    Book value on 12/31/15 (18.662)
    Gain on disposal $ 10.338

    3. 150% Declining-Balance:

    Cash proceeds $ 29.000


    Book value on 12/31/15 (31.487)
    Loss on disposal $ (2.487)
    The reported gain or loss on the sale of an asset has no direct cash effects. The only direct cash
    effect associated with the sale of this machine is the $29,000 received by Swanson & Hiller, Inc.
    from the sale of the machine.

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