Computing and Recording Depreciation

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ACT300_Critical_Thinking_Template_Option_01_Module_06.xlsx
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Straight-Line Depreciation

ACT300 Principles of Accoutning I
Module 6: Critical Thinking Template Option 1 (Depreciation Template)
Straight-Line Depreciation Input amounts Record journal entry for depreciation expense for the third year:
Cost $0
Salvage value 0 Debit Credit
Depreciable cost $0 Dec. 31 Depreciation Expense
Useful life 0 years Accumulated Depreciation - Equipment
Useful life in units of production 0 To record annual depreciation
Record journal entry for asset disposal in the fourth year:
Straight line method
Formula Cost - Salvage Value * * Depreciable cost = Cost - Salvage Value Debit Credit
Useful life in years Dec. 31 Cash
Accumulated Depreciation
= 0 Loss on disposal
Equipment
To record disposal of equipment
Annual depreciation expense= 0
Also, compute the straight line depreciation rate. The formula is 100% divided by the useful life in years
Compute the straight line depreciation rate below:
0%
0
Straight line depreciation rate ERROR:#DIV/0!
Depreciation for the Period End of Period
Annual period Depreciable Cost Depreciation rate Depreciation Expense Accumulated Depreciation Book Value
*
Year 1
Year 2
Year 3
Year 4
Year 5 **
* Cost of machine
** Salvage value is not depreciated

Units-of-Production

ACT300 Principles of Accoutning I
Module 6: Critical Thinking Template Option 1 (Depreciation Template)
Units of Production Depreciation Input amounts
Cost $0
Salvage value 0 Record journal entry for depreciation expense for the third year:
Depreciable cost $0
Useful life 0 years
Useful life in units of production = 0 Debit Credit
Dec. 31 Depreciation Expense
Accumulated Depreciation - Equipment
Units of Production To record annual depreciation
Step 1:
Depreciation per unit Cost - Salvage Value * * Depreciable cost = Cost - Salvage Value Record journal entry for asset disposal in the fourth year:
Useful life in units of production
Debit Credit
Dec. 31 Cash
Accumulated Depreciation
Loss on disposal
Depreciation per unit = $ - 0 Equipment
To record disposal of equipment
Step 2:
Depreciation expense Depreciation per unit x Units of production*
= 0.00 x 0
Depreciation expense = $ - 0
Depreciation for the Period End of Period
Annual period Number of Units Depreciation per unit Depreciation Expense Accumulated Depreciation Book Value
$0 *
Year 3
* Cost of item
** Salvage value is not depreciated

Double-Declining Balance

ACT300 Principles of Accoutning I
Module 6: Critical Thinking Template Option 1 (Depreciation Template)
Double Declining Balance Depreciation Input amounts
Cost $0
Salvage value 0 Record journal entry for depreciation expense for the third year:
Depreciable cost $0
Useful life 0 years
Useful life in miles 0 Debit Credit
Dec. 31 Depreciation Expense
Accumulated Depreciation - Equipment
Units of Production To record annual depreciation
Step 1:
Straight Line Rate = 100% * Depreciable cost = Cost - Salvage Value
Useful life in years
Straight line depreciation rate =
Step 2:
Double-declining-balance rate 2 x Straight-line rate
= 2 x 0%
Double-declining-balance rate 0%
Step 3:
Depreciation expense Double-Declining- balance rate x Beginning-period book value
= 0% x $0
Depreciation expense $0
Depreciation for the Period End of Period
Annual period Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value
$0 *
Year 1
Year 2
Year 3
Year 4
Year 5
* Cost of equipment