Valix Finacc vol 1 Problem 17-7

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 17 Problem 17-7

a. Service hours method:

                                                                                                                                                        960,000 – 60,000

Depreciation rate per hour = ---------------------------- = 112.50   

                                                                                    8,000 hours

                                                                                                                          

    2008  (1,000 hours x 112.50)                                                                                      112,500

    2009  (2,000 hours x 112.50)                                                                                      225,000

b. Sum of years’ digits:

    Sum of half years     =      45

    2008 (9/45 x 900,000 x 3/6)                                                                                         90,000

    2009  January 1 – March 31 (9/45 x 900,000 x 3/6)                                                      90,000

                   April 1 – September 30 (8/45 x 900,000)                                                     160,000

             October 1 – December 31 (7/45 x 900,000 x 3/6)                                              70,000

                                                                                                                                                                                320,000