Use the following method to calculate the yearly depreciation allowances and book values for a firm that has purchased $150,000 worth of office equipment that qualifies as depreciation property. the equipment is estimated to have a salvage (market) value of $30,000 (20% of the original cost) after the end of its 10-year depreciable life.

a. straight line
b. macrs
c. sum-of-years' digits

a. Straight Line Method Depreciation= $ 2400

b. MACRS

c. Sum-of-Years' Digits

Explanation:

a. Straight Line Method Depreciation=

Purchase Cost- Salvage Value/ No of useful life *depreciation rate

=$ 150,000- $30,000/10 * 20%

=120,000/10* 20%= 12000* 20/100=$ 2400

b. MACRS

Since it is a non-form 10-year property, the company can elect to use either the 150% or 200% declining balance method.

Depreciation in 1st Year = Cost ×1/Useful Life× A × Depreciation Convention

Depreciation in Subsequent Years =

(Cost − Depreciation in Previous Years) ×1/ Recovery Period× A

Where,

A is 100% or 150% or 200%.

Depreciation for the the first year $ 150,000/10 *200%= $30,000

Depreciation for the the 2nd year =$ 150,000-30,000/10 *200%= $24,000

Depreciation for the the third year =$ 150,000-30,000- 24000/10 *200%

=$ 19,200

Depreciation for the the 4th year $ 150,000-30,000-24000-19200/10 *200%=  Note A

Note A: MACRS declining balance changes to straight-line method when that method provides an equal or greater deduction. Deduction under 200% declining balance MACRS for 4th year  would be $ 153,600 ($150000 - $30,000 - $24000 - $19200  × 1/10 × 200%. This is greater than depreciation under straight line method .

c. Sum-of-Years' Digits Method Depreciation

Depreciation Amount = Acquisition Cost - Salvage Value = $ 120,000

Sum of useful life= 10+9+8+7+6+5+4+3+2+1= 55

Depreciation Factor = 10/55, 9/55, 8/55, 7/55 etc.

Depreciation for the 1st year= 10/55* 120,000= $ 21,818.2

Depreciation for the 2nd year= 9/55* 120,000= $ 19 636.4

Depreciation for the 3rd year= 8/55* 120,000=  $17,546

Depreciation for the 4th year= 7/55* 120,000=  $ 15,273

Depreciation for the 5th year= 6/55* 120,000= $ 13,091

Depreciation for the 6th year= 5/55* 120,000= $ 10,909.1

Depreciation for the 7th year= 4/55* 120,000= $ 8727.3

Depreciation for the 8th year= 3/55* 120,000=  $ 6545.5

Depreciation for the 9th year= 2/55* 120,000=  $4363.63

Depreciation for the 10th year= 1/55* 120,000= $ 2181.81

c

explanation:

c because the item on a bank statement is also referred to as an account statement. in addition, it provides the beginning balance, ending balance, statement date, transaction date for each transaction, payee, customer name and address, statement period, the account holder's account number, and the bank's customer service number