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Question 1

By December 6, 2021No Comments

Question 1On 6 September 20Y1,East River Tug Co.purchased a new tugboat for $400,000.The estimated life of the boat was 20 years,with an estimated residual value of$40,000.(a)Compute the depreciation on this tugboat in 20Y1 and 20Y2 using the followingmethods.Apply the half-year convention.(round to the nearest dollar.Showworkings.20Y120Y2(i)Straight-line(ii)200%declining balance(iii)150%decliningbalance(b)The estimated total output of the tugboat was 360 miles.The tugboat sailed 30miles in 20Y1 and 40 miles in 20Y2.Compute the depreciation on this tugboat in20Y1 and 20Y2.20Y120Y2Units-of-productionQuestion 2Dynasty Co.uses straight-line depreciation in its financial statements,withdepreciation for a partial year rounded to the nearest full month.On 2 October 20X1,Dynasty purchased equipment at a cost of $140,000.Forfinancial reporting purposes,the useful life of this equipment was estimated at 5years,with a $30,000 salvage value.Compute the depreciation expense relating to this equipment that Dynasty willrecognize in its financial statements with year ended 31 December in the followingyears.If no depreciation will be recognized in a particular year,write zero.YearAmount(S)20X120X220X320X420X520X6