Valix Finacc vol 1 Problem 17-4

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 17 Problem 17-4

a. Straight line method:                     

            2008                                                                                                                   27,500            2009                                                                                                                  55,000           

b. Working hours method:

                                                                               550,000                                                     

                                                Rate per hour = ------------------- = 11                   

                                                                            50,000 hours                                            

                                                                                                                                                                                    2008  (3,000 hours x 11)                                                                                    33,000           2009  (5,000 hours x 11)                                                                                       55,000

                       

c. Output method:                                                                                                     

        550,000                                                

Rate per unit =  -------------------- =  2.75                

                                                                            200,000 units

            2008 (18,000 units x 2.75)                                                                                     49,500           2009 (22,000 units x 2.75)                                                                                            60,500                                  

d. Sum of years’ digits:

                                                                                  10 + 1

                                                               SYD = 10 (------------)   =  55

                                                                                      2

                                                                                                                                                            2008 (10/55 x 550,000 x 6/12)                                                                            50,000

            2009  Jan. 1-June 30                                                                                            50,000

                     July 1-Dec. 31 (9/55 x 550,000 x 6/12)                                                         45,000                                                                                                                                              95,000

                       

e. Double declining balance:

2008 (570,000 x 20% x 6/12)                                                                                57,000

            2009 (570,000 – 57,000 x 20%)                                                               102,600