   Chapter 10, Problem 6DQ

Chapter
Section
Textbook Problem

a. Under what conditions is the use of the straight-line depreciation method most appropriate?b. Under what conditions is the use of the units-of-activity depreciation method most appropriate?c. Under what conditions is the use of the double-declining-balance depreciation method most appropriate?

a.

To determine

Methods of Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its wear and tear, or obsolescence. It is a method of distributing the cost of the fixed assets over its estimated useful life.

The three methods of depreciation are:

• Straight-line method: Under the straight-line method of depreciation, the same amount of depreciation is allocated every year over the estimated useful life of an asset.
• Units-of-activity method: In this method of depreciation, the amount of depreciation is charged based on the units of production each year.
• Double-declining balance method (Accelerated method): In this method of depreciation, the diminishing value of the asset is taken into consideration for determining the depreciation for the succeeding years.

To explain: the conditions under which the straight-line depreciation method is the most appropriate to use.

Explanation

When a company’s fixed assets generates same amount of rev...

b.

To determine

To explain: the conditions under which the units-of-activity depreciation method is the most appropriate to use.

c.

To determine

To explain: the conditions under which the double-declining-balance depreciation method is the most appropriate to use.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Why cant the Fed control the money supply perfectly?

Brief Principles of Macroeconomics (MindTap Course List)

FOOT AND BALANCE A T ACCOUNT Foot and balance the accounts payable T account shown below.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

It is a fact that the federal government (1) encouraged the development of the savings and loan industry, (2) v...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List) 