Exercise 11–2
1. Straight-line:
2. Sum-of-the-years’ digits:
Sum-of-the-digits is ([10 (10 + 1)] ÷ 2) = 55
3. Double-declining balance:
4. One hundred fifty percent declining balance:
5. Units-of-production:
= $0.50 per unit depreciation rate
Exercise 11–3
1. Straight-line:
2. Sum-of-the-years’ digits:
Sum-of-the-digits is {[10 (10 + 1)]/2} = 55
3. Double-declining balance:
4. One hundred fifty percent declining balance:
Straight-line rate is 10% (1 ÷ 10 years) × 1.5 = 15% rate
2018 $115,000 × 15% × 3/12 = $ 4,313
Exercise 11–3 (concluded)
5. Units-of-production:
Exercise 11–4
Building depreciation:
Building addition depreciation:
Remaining useful life from June 30, 2018, is 27.5 years.
Exercise 11–5
Asset A:
Straight-line rate is 20% (1 ÷ 5 years) × 2 = 40% DDB rate
Asset B:
Sum-of-the-years’ digits is 36 {[8 (8 + 1)]÷2}
Asset C:
Asset D:
Asset E:
Straight-line rate is 12.5% (1 ÷ 8 years) × 1.5 = 18.75% rate
Exercise 11–6
Requirement 1
1. Straight-line:
2. Sum-of-the-years’ digits:
Sum-of-the-years’ digits is ([6 (6 + 1)] ÷ 2) = 21
3. Double-declining balance:
1/6 (the straight-line rate) × 2 = 1/3 DDB rate
Exercise 11–7
Building depreciation:
$8,000,000* – 800,000**
= $240,000 per year
30 years
Furniture and fixtures depreciation:
1/10 or 10% (the straight-line rate) × 2 = 20% DDB rate
or,
2019: ($1,200,000 – 180,000) × 20% = $204,000
Office equipment depreciation:
or,
Exercise 11–8
Requirement 1
U.S. GAAP:
Requirement 2
IFRS:
2018: Machine:
$100,000 8 = $12,500 × 6/12 = $6,250
Drill:
2019: Machine:
Drill:
Exercise 11–9
Requirement 1
Depreciation for 2018: $240,000 6 = $40,000 × 9/12 = $30,000
Requirement 2
($ in thousands) Before After
Revaluation Revaluation
Equipment $240,000x 220/210 = $251,429
Requirement 3
Requirement 4
($ in thousands) Before After
Revaluation Revaluation
Equipment $240,000x 195/210 = $222,857
Accumulated depreciation 30 ,000x 195/210 = 27 ,857
*If a revaluation surplus account relating to the same asset had existed, that
account would have been debited up to the amount of its balance before debiting
revaluation expense.
Exercise 11–10
Requirement 1
Cash…………………………………………………………………….. 210,000
Accumulated depreciation—equipment (account balance) 170,000*
Requirement 2
Cash…………………………………………………………………….. 245,000