Question:

Help with calculating accumulated depreciation

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Compute the amount of Accumulated deprection for each at December 31, 2008:

1. Use straight-line method

Acquired: 1/1/06

Cost: 98,800

Salvage Value: 7660

Useful life in years: 5

2. Declining balance method (Use double-declining rate)

Acquired: 1/1/06

Cost: 121,130

Salvage Value: 11,690

Useful life in years: 4

3. Units of Activity method

(For the units-of activity method, total miles are expected to be 123,060. Actual miles of use in the first 3 years were: 2007, 26,470; 2008, 35,740; and 2009, 31,570)

Acquired: 1/1/07

Cost: 86270

Salvage Value: 8310

Useful life in years: 5

For answers 1 I got 59,280.00 and for #2 I got 105,988.75 . Please tell me if these are correct and if not please help. I dont know how to do #3

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1 ANSWERS


  1. 1. Using SL method = (98,800 - 7,660) * 3 / 5 = $54,684

    2. Using DB method = $105,988.75

    3. Using Activity method = (86,270 - 8,310) * (26,470 + 35,740) / 123,060 = $39,410.79

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