Valix Finacc vol 1 Problem 17-9

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 17 Problem 17-9

                                                                               Depreciable           Life in                         Annual

Assets                               Cost           Salvage             cost                   years         depreciation

Machinery                       310,000            10,000             300,000                   5                 60,000

Office equipment           110,000            10,000             100,000                 10                   10,000

Building                        1,600,000          100,000          1,500,000                 15                 100,000

Delivery equipment       430,000            30,000             400,000                   4               100,000

                                    2,450,000                                2,300,000                                    270,000

                                                                                                                                               

a. Composite rate   =   270,000 / 2,450,000   =   11.02%

b. Composite life     =   2,300,000 / 270,000   =    8.52 years

c. Depreciation                                                                                     270,000

            Accumulated depreciation                                                                             270,000