 Book value accounting problem

### Question Description

I don’t understand this Accounting question and need help to study.

i just need help with requirement 3 part a. here are pics u will need

http://imgur.com/wPk5fQA

http://imgur.com/DiV6wpC

pic 1 is the info you need to solve the problem. pic 2 is the problem that needs to be solved

thanks Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service. Cost = \$42,000

Estimated life = 5 years (or) 200,000 hours

Salvage hours = \$2,000

Company A: Straight-line depreciation

Depreciation expense every year = (Cost – Salvage value)/Estimated life

( (\$42,000 - \$2,000)/5 years

( \$8,000 per year

Therefore, Depreciation expense for:

2008: \$8,000

2009: \$8,000

2010: \$8,000

2011: \$8,000

2012: \$8,000

Company-B: Double-declining balance method

Depreciation expense = Beginning of the year balance x Double-declining rate

Double declining rate = Straight line rate x 2 = 20% (for 5 years life) x 2 = 40%

2008: \$42,000 x 40% ( \$16,800

2009: (\$42,000 - \$16,800) x 40% ( \$10,080

2010: (42,000-16,800-10,080) x 40% ( \$6,048

2011: (42,000-16,800-10,080-6,048) x 40% ( 3,628.80

2012: (42,000-16,800-10,080-6,048-3,628.80) x 40% + Adjustment ( \$3,443.20

Note: The actual calculation in the last year works out to \$2,177.28. But the net book value at the end of Year 5 should be equal to its salvage cost, \$2,000. During the 1st 4 years, the total depreciation expense was 16,800+10,080+6,048+3,628.80 ( 36,556.80. The balance amount to be depreciated in year 5 would be \$40,000 - \$36,558.80 ( \$3,443.20

Company C: Units of production method

Depreciation expense per hour = (\$42,000 - \$2,000)/200,000 hours ( \$0.20 per hour

Depreciation expense for:

2008: 50,000 hours x \$0.20 per hour ( \$10,000

2009: 55,000 hours x \$0.20 per hour ( \$11,000

2010: 40,000 hours x \$0.20 per hour ( \$8,000

2011: 44,000 hours x \$0.20 per hour ( \$8,800

2012: 31,000 hours x \$0.20 per hour – Adjustment ( \$2,200

Note: The actual calculation for 2012 is \$6,200. But the book value should not go below the salvage value. The total depreciation expense charged till 2011 works out to \$37,800 (10,000 + 11,000 + 8,000 +8,800). The balance to be depreciated is \$2,200 (40,000 – 37,800). hinanoureen (1599)
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