Principles of Accounting II Assignment III (This assignment is continuation from the previous assignment)

1597173492583_UnitII_PartII.xlsx

Unit 2

Cookie Creations - Part 2 - Case Scenario
Instructions:
Compute the depreciation expense under the following methods for the year indicated.
(a) Straight-line for 2020 (see 10-9)
(b) Units-of-activity (see 10-11) for 2020, assuming milage usage estimate is 15,000 miles; 45,000 miles in 2021; 50,000 miles in 2022.
(c) Declining-balance (see 10-13) using double the straight-line rate for 2020 and 2021.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a)	Straight-line method
	Cost	$40,500
	Less: Salvage value	7,500
	Depreciable cost	33,000
	Useful life (years)	5
	Annual depreciation	$6,600
	2020 Depreciation:
	Annual Depreciation	$6,600
	Months van in use	3
	2020 partial year depreciation	$1,650
(b)	Units-of-activity method
	Cost	$40,500
	Less: Salvage value	7,500
	Depreciable cost	33,000
	Useful life (miles)	110,000
	Depreciable cost/mile	$0.30
	2020 Depreciation:
	Depreciable cost/mile	$0.30
	Miles van used	15,000
	2020 depreciation expense	$4,500
(c)	Declining-balance method:
	Straight-line rate	20%
	Double the straight-line rate	40%
	2020 Depreciation:
	Cost	$40,500
	Double the straight-line rate	40%
	2020 full year depreciation	16,200
	Number of months in use	3
	2020 partial year depreciation	$4,050
	2021 Depreciation:
	Cost	$40,500
	Less: accumulated depreciation, 2020	4,050
	Ending book value, 2020	$36,450
	Beginning book value, 2021	$36,450
	Double the straight-line rate	40%
	2021 depreciation expense	$14,580