Valix Finacc vol 1 Problem 17-8

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 17 Problem 17-8

a. Rate per unit (900,000 / 180,000)                                                                                   5.00                  

    2008 (5,000 x 5)                                                                                                            25,000         

    2009 (20,000 x 5)                                                                                                        100,000                                          

b. Double declining balance:                                                                                                

    Fixed rate (100% / 8 x 2)                                                                                                 25%           

                                                                             

    2008 (920,000 x 25% x 6/12)                                                                                      115,000          

    2009 (920,000 – 115,000 x 25%)                                                                                 201,250                                                              

c. Sum of years’ digits:

    July 1 – December 31, 2008 (900,000 x 8/36 x 6/12)                                      100,000

    January 1 – June 30, 2009 (900,000 x 8/36 x 6/12)                                                     100,000

    July 1 – December 31, 2009 (900,000 x 7/36 x 6/12)                                        87,500

    Depreciation for 2009                                                                                               187,500