AC 302 CHAPTER 11 QUESTION 1

AC 302 CHAPTER 11 QUESTION 1 
Name				Date		
Instructor				Course		
Intermediate Accounting 14th Edition by Kieso Weygandt and Warfield						
Primer on Using Excel in Accounting by Rex A Schildhouse						
						
E11-1 (Depreciation Computations—SL, SYD, DDB) Lansbury Company purchases equipment on 						
January 1, Year 1, at a cost of			$518,000 	. The asset is expected to have a service 		
life of	12 	years and a salvage value of			$50,000 	
						
Instructions:						
"(a) Compute the amount of depreciation for each Years 1 through 3 using the straight-line
     depreciation method."						
						
Straight-line method depreciation for each of Years 1 through 3 is computed as:						
						
Cost:			Amount			
Salvage value:			Amount			
Depreciable value:			Formula			
Asset life: (Years)			Number			
Annual straight-line depreciation value:			Formula			
						
Excel formula for straight-line depreciation is =SLN(Cost,Salvage,Life)						
Area for Excel calculations as desired.						
						
"(b) Compute the amount of depreciation for each Years 1 through 3 using the sum-of-years digits
     depreciation method."						
						
						
"The sum of 1 through 12 = 1+2+3+4+5+6+7+8+9+10+11+12 =
                                       1+12 + 2+11 + 3+10 + 4+9 + 5+8 + 6+7 =
                                       (1+12) + (2+11) + (3+10) + (4+9) + (5+8) + (6+7) =
                                       (13) + (13) + (13) + (13) + (13) + (13) =
                                       13 X (12/2) =
                                       13 X 6 = 78
          the sum of the first year and the last year multiplied by one half of the total number of years.

Hint: Since ""Sum-of-Years-Digits"" title contains an ""S"", use salvage value to compute periodic
         depreciation expense."						
						
						
						
						
						
						
						
						
						
						
Cost:			Amount			
Salvage value:			Amount			
Depreciable value:			Formula			
						
			"Numerator /
Year"	Denominator	"Period
Depreciation"	
Depreciation expense for year:		1	Number	Number	Formula	
Depreciation expense for year:		2	Number	Number	Formula	
Depreciation expense for year:		3	Number	Number	Formula	
						
The Excel formula for Sum-of-Years-Digits Depreciation is =SYD(Cost,Salvage,Life,Period)						
						
Depreciation expense for year: 			1	Formula		
Depreciation expense for year: 			2	Formula		
Depreciation expense for year: 			3	Formula		
						
(c) Compute the amount of depreciation for each Years 1 through 3 using the double-declining balance method. (In performing your calculations, round constant percentage to the nearest one-hundredth of a point and round answers to the nearest dollar.)						
						
						
						
"Hint: Since ""Double-Declining Balance Method"" title does not contain an ""S"", do not use salvage value
        to compute periodic depreciation expense. However, ensure that book value does not violate
        salvage value."						
						
						
						
Cost:			Amount			
Salvage value:			Amount			
Asset life: (Years)			Number			
Annual Straight-line Depreciation rate: 			Formula			
Double-Declining factor: 			200%			
Double-Declining annual rate: 			Formula			
						
	Year:	"Beginning
Balance"	"Double
Declining
rate:"	"Annual
Depreciation
Amount:"	"Ending
Balance"	
	1	Amount	Percentage	Formula	Formula	
	2	Value	Percentage	Formula	Formula	
	3	Value	Percentage	Formula	Formula	
						
The Excel formula for Accelerated Depreciation is =DDB(Cost,Salvage,Life,Period,Factor)						
1			Formula			
2			Formula			
3			Formula			
Note: Minor differences may occur due to rounding and significant digits.