Unit 9 depreciation by years
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Purdue Global University**We aren't endorsed by this school
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MM 255
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Accounting
Date
Dec 20, 2024
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2
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Student: Alex HigginsDate: 12/17/24Instructor: Paul JonesCourse: MM255 Business Math and StatisticalMeasuresAssignment: Unit 9 Lab HomeworkUse the sum-of-the-years'-digits depreciation method to make a depreciation schedule (first two years) for a forklift that cost $, has an expected useful life of ten years, and has a residual value of $.33,0002,700Complete the following table for two years.YearDepreciation rateAnnual depreciationAccumulated depreciationEnd-of-year book value12Begin with the first year. To find the year's depreciation using the sum-of-the-years'-digits method, first find the year's depreciation rate.To find the year's depreciation rate, first find the sum from 1 through the years of expected life using the formula , where n is number of years of expected life.n(n + 1)2Substitute 10 for n in the formula Sum from 1 through the years of expected life.=n(n + 1)2Sum from 1 through the years of expected life =10(10 + 1)2Substitute.= 55Simplify.The formula for the year's depreciation rate is given by .Year's depreciation rate =number of years remaining of expected lifesum from 1 through the years of expected lifeThe depreciation rate for the first year is .1055The next step in finding the year's depreciation using the sum-of-the-years'-digits method is finding the depreciable value.The formula for depreciable value is given by .Depreciable value = total cost − salvage valueSubstitute $for the total cost and $for the salvage value in the formula .33,0002,700Depreciable value = total cost − salvage valueDepreciable value = $$33,000 −2,700Substitute.= $30,300Subtract.The formula for the depreciation for the year is given by .Depreciation for the year = depreciable valuedepreciation rate for the year
Substitute $for the depreciable value and for the depreciation rate for the year in the formula . Round the answer to the nearest cent.30,3001055Depreciation for the year = depreciable valuedepreciation rate for the yearDepreciation for the year =$30,3001055= $5,509.09Simplify.Therefore, the depreciation for the year is $.5,509.09Now, find the accumulated depreciation for the first year. To do this, use the formula for the accumulated depreciation. The formula for the accumulated depreciation is given by Accumulated depreciation.= annual depreciation + sum of all the previous depreciationSubstitute $for annual depreciation and $0 for the sum of all the previous depreciation in the formula Accumulated depreciation.5,509.09= annual depreciation + sum of all the previous depreciationAccumulated depreciation = $$05,509.09 +Substitute.= $5,509.09Add.Therefore, the accumulated depreciation is $.5,509.09Next, find the first end-of-year book value. To do this, use the formula for first end-of-year book value. The formula for first end-of-year book value is given by First end-of-year book value.= total cost − first year's depreciationSubstitute $for total cost and $for first year's depreciation in the formula First end-of-year book value. Round the answer to the nearest cent.33,0005,509.09= total cost − first year's depreciationFirst endofyear book value = $$33,000 −5,509.09Substitute.= $27,490.91Subtract.Therefore, the first end-of-year book value is $. The completed table for the first year is shown.27,490.91YearDepreciation rateAnnual depreciationAccumulated depreciationEnd-of-year book value11055$5,509.09$5,509.09$27,490.91