ACC 213 FINAL EXAM

1. Calculate the salvage value of a forklift purchased Jan 1, 2009 for 40,000, with a 7 year useful life, that uses straight line depreciation and has a annual depreciation of 5,000.

5,000 (40000 - X) / 7 (x or salvage value) 5,000

Depreciation (cost- salvage value)/ estimated useful life

1. On January 4, 2007, Bloomberg Company purchased new equipment for 204,000 that had a useful life of four years and a salvage value of 20,000.

a. Prepare a schedule showing the annual depreciation and end-of-year accumulated depreciation for the first three years of the asset's life under the:

I. Straight-line method

Year 1 158,000 (-46,000)

Year 2 112,000 (-46,000)

Year 3 66,000 (-46,000)

II. Sum-of-the-years digits method

Year 1 122,400 (-81,600)

Year 2 85,680...