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Accounting

ACC 281 E 10 -7 8 9 Straight Line Method

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ACC 281 E 10 -7 8 9 Straight Line Method
E10-7
Cost - Salvage Value = Depreciated cost
$30,000 - $2,000 = $28,000
Depreciated cost ÷ Useful life = Annual
Depreciation
$28,000 ÷ 8 yrs = $3,500
Year Dep. Cost Dep. rate annual dep. Acc. Dep.
Value
2008 $28,000 × 12.5% = $3,500 3,500 $24,500
2009 $28,000 × 12.5% = $3,500 7,000 $21,000
Units of Activity Method
Dep. Cost ÷ Total units of activity = Dep. Cost per
unit
$28,000 ÷ 100,000 miles = $.28
Dep. Cost per unit × unit of activity during year =
annual dep. Exp.
$.28 × 15,000 miles = $4,200 (2008)
$.28 × 12,000 miles = $3,360 (2009)
Declining Balance Method
Book value beg. of year × declining balance rate =

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