BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
5 views

Using the sum-of-the-years’-digits method, how much depreciation expense should Vorst record in 2020 for Asset B?

  1. a. $6,000
  2. b. $9,000
  3. c. $11,000
  4. d. $12,000

To determine

Choose the correct option by calculating the depreciation expense of Asset B for 2020 under sum of the year’s digit method.

Explanation

Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income statement reflecting the consumption of economic benefits of long-term asset on account of its wear and tear or obsolesces.

Sum-of- the-years’ digits method: Sum-of-the years’ digits method determines the depreciation by multiplying the depreciable base and declining fraction.

Calculate the depreciation expense of Asset B for 2020 under sum of the year’s digit method as follows:

Year

Depreciable

Base

 ($) (1)

 Fraction 

Depreciation expense

($)

201745,000×515=15,000
201845,000×415=12,000
201945,000 315 9,000
202045,000 215 6,000

Table (1)

Hence, the depreciation expense of Asset B for 2020 under sum of the year’s digit method is $6,000

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

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Describe business marketing

MKTG 12:STUDENT ED.-TEXT

MIRR Refer to problem 11-1. What is the projects MIRR?

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

REAL RISK-FREE RATE You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.5%. Your b...

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

What is the purpose of interim quality standards?

Cornerstones of Cost Management (Cornerstones Series)