Hello buddy, just completed chapter 10. Take a look and get back if you require any clarifications

Question 1:
According to Generally Accepted Accounting Principle, the matching principle will often
require that organization when preparing their financial reports have incorporated the
depreciation for assets that have a useful life of more than one year (Finkler, Ward, & Calabrese,
2013, p. 89). To expound on the reason as to why depreciation has to be considered is that lets
take a situation where a company has purchased a machine that will be in use for the next 8
years. Generally, in the next 8 years, the machine will continue to generate revenue for the
company. However, the cost of the machine will only be considered in its first year of use. As a
result, any income that the machine generates in the next 7 years will have the company
overstate its income due to the price of the machine.
Question 3:
Solving using Straight Line Method
Details
Cost of Equipment
Add: Upgrade cost
Total cost of Equipment
Less: Salvage Value
Depreciation Cost
Expected useful life
Annual Depreciation(Divide
depreciation cost with the
usefule lives

Amount
4,250,000
135000
4,385,000
425000
3,960,000
5

792,000

Solving using Double Declining Method

Details

Amount

Cost of Equipment
Add: (Upgrading Cost)
Total cost of Equipment
Expected usefule life
Annual Depreciation
DDB Depreciation Rate

Year
1
2
3
4
5

4,250,000
135,000
4,385,000
5
20%
40%
Beginning
DDB
Accumulated Ending
Book Value Depreciation Depreciation Book Value
$4,385,000
$1,754,000
$1,754,000 $2,631,000
$2,631,000
$1,052,400
$2,806,400 $1,578,600
$1,578,600
$631,440
$3,437,84...