Fall Semester – 2020∼2021

Assignment IV - Depreciation
Programme Name & Branch : B.Com
Course Code & Name : CCA1014 – Business Mathematics Slot : C1
1. Using the straight-line method of depreciation, find the amount of depreciation per year if a fixed
asset bought on January 6 for $17,000 has an estimated life of 15 years and a salvage value of
$2,000.
2. Using the straight-line method, calculate the amount of depreciation at the end of the second year
on a piece of machinery purchased on October 28 for $4,650. The estimated useful life is 5 years
and the trade-in value is $1,650.
3. Prepare a depreciation schedule for a piece of equipment purchased on January 8 for $5,000.
Transportation costs amounted to $500. The estimated useful life is 4 years, and the salvage value
is $500. Use the straight-line method of depreciation.
4. An item of equipment was bought on January 1 for $30,000. It has an estimated useful life of
100,000 hours and a salvage value of $4,000. If it was used for 35,650 hours in its first year of
operation, what is the depreciation according to the units-of-production method?
5. Using the units-of-production method, find the depreciation on a piece of assembly-line equipment
that produced 9,750 units during its first year in operation. The cost of the equipment was $40,000.
It has a salvage value of $2,500 and an estimated lifetime output of 75,000 units.
6. K&M Painting Contractors started business on June 1. One month prior they purchased a van for
$8,000 and incurred additional costs amounting to $1,000 to get the van in operating condition.
They also bought a paint sprayer for $300. The van has an estimated useful life of 100,000 mi and
a trade-in value of $2,000. The paint sprayer has an estimated useful life of 2,750 hours and a
trade-in value of $25. What is the depreciation, based on the units-of-production method, at the
end of the year if they put 5,670 mi on the van as of December 31 and used the paint sprayer 250
hours?
7. Office furniture was purchased by Chester Company on January 1 for $2,000. Its estimated useful
life is 20 years, and it has a salvage value of $250. Using the double declining balance method of
depreciation, what is the depreciation at the end of the first year?
8. Determine the accumulated depreciation at the end of the second year by using the double declining
balance method of depreciation on a tractor that cost $9,000. Its estimated useful life is 10 years,
and the trade-in value is $500. It was bought on October 20.
9. According to the double declining balance method, what is the accumulated depreciation at the end
of 2 years on a piece of machinery bought on January 13 for $4,000? The estimated useful life is 5
years, and the salvage value is $200. (Round the depreciation to the nearest dollar.)
10. Using the sum-of-the-years-digits method, find the first years depreciation on a tractor that cost the
town of Hill $10,000 and has an estimated useful life of 20 years and a salvage value of $1,000.
11. Use the sum-of-the-years-digits method to find the book value (to the nearest cent) at the end of
the first year on a piece of machinery that cost $15,425. It has a salvage value of $2,425 and an
estimated useful life of 10 years.
12. Using the sum-of-the-years-digits method, determine the accumulated depreciation at the end of 2
years on an item that cost $90,000 and has an estimated useful life of 50 years and a salvage value
of $5,000. (Round the depreciation to the nearest dollar.)
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