【正文】 ation, using the following methods: straightline method, unitsofproduction method, and doubledecliningbalance method. 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Accounting for Depreciation ? Depreciation can be caused by physical or functional factors. ? Physical depreciation（物理性 /自燃性） factors include wear and tear during use or from exposure to the weather. ? Functional depreciation（功能性） factors include obsolescence and changes in customer needs that cause the asset to no longer provide services for which it was intended. LO 2 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Factors in Computing Depreciation ? The expected useful life of a fixed asset is estimated at the time the asset is placed into service. The residual value of a fixed asset at the end of its useful life is also estimated at the time the asset is placed into service. LO 2 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. StraightLine Method LO 2 Initial cost $24,000 Expected useful life 5 years Estimated residual value $2,000 The annual straightline depreciation of $4,400 is puted below: Annual Depreciation = Cost – Residual Value Useful Life $24,000 $2,000 5 years = = $4,400 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. LO 2 UnitsofProduction Method ? The unitsofproduction method provides the same amount of depreciation expense for each unit produced or each unit of capacity used by the asset. ? Step 1. Determine the depreciation per unit as: ? Step 2. Compute the depreciation expense as: Depreciation Expense = Depreciation per Unit x Total Units of Production Used Depreciation per Unit = Cost – Residual Value Total Units of Production 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. UnitsofProduction Method LO 2 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. DoubleDecliningBalance Method ? Step 3. Compute the depreciation expense by multiplying the doubledecliningbalance rate from Step 2 times the book value of the asset. LO 2 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. DoubleDecliningBalance Method The doubledecliningbalance depreciation for the full fiveyear life of the equipment is shown below. DEPRECIATION STOPS WHEN BOOK VALUE EQUALS RESIDUAL VALUE! STOP LO 2 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. The depreciation for the second year would then be $8,640, puted as follows: DoubleDecliningBalance Method LO 2 = [40% x ($24,000 – $2,400)] Second year depreciation = $8,640 Second year depreciation 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Depreciation for Federal Ine Tax ? MACRS (used for tax purposes) specifies eight classes of useful life and depreciation rates for each of the eight classes. ? The two most mon classes are the fiveyear class (includes automobiles and lightduty trucks) and the sevenyear class (includes most machinery and equipment). LO 2 聯(lián)邦所得稅的折舊 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Revising Depreciation Estimates A machine is purchased on January 1, 2022, for $140,000. LO 2 (continued) 169。 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use. Revising Depreciation Estimates During 2022, the pany estimates that the machine’s remaining useful life is eight years (instead of three) and that its residual value is $8,000 (instead of $10,000). Depreciation expense for each of the remaining eight years is determined as follows: LO 2 (concluded) 169。 2022 Cengage Learning. All Rights Reserved. May