Concept explainers
1. (a)
Methods of
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-production method: In this method of depreciation, the amount of depreciation is charged based on the unit of production each year.
- Double-declining balance 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 Compute: the amount of depreciation for the first year for A Company under the straight-line method
(b)
To Compute: the amount of first-year depreciation under the units-of- production method.
(c)
To Compute: the amount of first-year depreciation under the double-declining-balance method.
2.
To Show: the book value of the airplane of A Company under the three methods.
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