ACCT 201 1st Edition Lecture 24Outline of Last Lecture I. Straight=Line DepreciationII. Activity BaseIII. Double-DecliningOutline of Current LectureIV. Straight-Line DepreciationV. Activity BaseVI. Double-Declining (cont)Current LectureP5-3B from book:Straight-line Cost – Salvage# years useful life80,000 – 20,000 60,000 = = 6,000/year10 10A = L + SE-6000 Accum. Dep. -6000 Dep.Exp.Activity MethodCost – SalvageEst. total activity80,000 – 20,000 0.30 x 24,000 = 7,200 200,000 = 0.3/mileDouble-declining 2 2# useful life 10 = .2 OR 20%These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Current value x rate 80,000Year 1 80,000 x .20 = 16,000/dep. year 1 -16,000Year 2 64,000 x .20 = 12,800/year 2 64,000Year 3 51,200 x .20 = 10,240/year 3 -12,800 51,200Beg. Year 3 useful life remaining was adj. to 5 years (not 8)Cost 80,000Accum. Dep. (12,000) After 2 years 6,000 x 268,000 current valueCost – Salvage 68,000 – 20,000 48,000# years useful life 5 = 5 =
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