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    Calculating the Rate of Depreciation

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    Presented below is information related to LeBron James Manufacturing Corporation.

    Asset
    Cost
    Estimated Salvage
    Estimated Life (in years)
    A $ 40,500 $ 5,500 10
    B 33,600 4,800 9
    C 36,000 3,600 9
    D 19,000 1,500 7
    E 23,500 2,500 6

    Compute the rate of depreciation per year to be applied to the plant assets under the composite method. (Round answer to 2 decimal place, e.g. 4.83%.)

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    Solution Preview

    See attached file for solution in Excel.

    Presented below is information related to LeBron James Manufacturing Corporation.

    Original Estimated Estimated Depeciation Per Year
    Asset Cost Salvage Life (in years) (straight line)

    A $40,500 $5,500 10 $3,500
    B $33,600 $4,800 9 $3,200
    C $36,000 $3,600 9 $3,600
    D $19,000 $1,500 7 $2,500
    E $23,500 $2,500 6 $3,500

    Instructions:
    (a) Compute the rate of depreciation per year to be applied to the plant assets under the composite method.

    Calculations
    Note: Composite depreciation is a method of ...

    Solution Summary

    This solution provides a formatted MS Excel spreadsheet containing detailed illustrations, examples and notes that will enable a user to quickly calculate the rate of depreciation per year for plant assets under the composite method.

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