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Computing Depreciation Expenses

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E11-1
Castlevania Corporation purchased a truck at eh beginning of 2007 for $42,000 The truck is estimated to have a salvage value of $2,000 and a useful life of 160,000 miles. It was driven 23,000 miles in 2007 and 31,000 miles in 2008. Compute depreciation expense for 2007 and 2008.

E11-3
(depreciation computation SYD-DDB-Partial periods)
Judds Company purchased a new plant asset on April 1, 2007, at cost of $711,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Judd's accounting periods is the calendar year.
Instructions:
A) Compute the depreciation for this asset for 2007 and 2008 using the sum-of digits methods.
B) Compute the depreciation for this asset for 2007 and 2008 using the double-declining balance method.

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Solution Summary

The solution computes depreciation for assets using sum-of digits methods and double-declining balance methods.

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E 11-1

2007: [($42,000 - $2,000)*23,000]/160,000 = $5,750
2008: [($42,000 - $2,000)*31,000]/160,000 = $7,750

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