ACCT 1211: Accounting I - Assignment 9

ACCT 1211: Accounting I A9-1
Acct 1211_Student ID_Student
Name_Assignment_9
Question 1
(25 marks)
A.
Amortization Expense Per Year
Straight- Units-of- Double-Declining
Year Line Production Balance
2018 $160,000 $240,000 $320,000
2019 $160,000 $128,000 $106,667
2020 $160,000 $115,200 $35,556
$480,000 $483,200 $462,222
Computations:
Straight-Line:
Purchase price = $500,000
Residual = $20,000
Value = $480,000
Depreciation Value = $480,000 / 3 = 160,000
Units-of-Production:
Purchase price = $500,000
Residual = $20,000
Value = $480,000
Total units produced = 3,000,000
Unit of product = $480,000 / 3,000,000 = 0.16
Year Units Produced (A) Units (B) Depreciation (A*B)

A9-2 Assignment 9
2018 15,00,000 0.16 2,40,000
2019 8,00,000 0.16 1,28,000
2020 7,20,000 0.16 1,15,200
Double-Declining Balance:
Year Value Rate Depreciation
2018
4,80,000
0.67 3,20,000
2019
1,60,000
0.67 1,06,667
2020 53,333 0.67 35,556
B.
Double-Declining Balance provides the lowest deprecation, which will increase the net income
for the fiscal year. The high net income does not mean the equipment was used more efficiently,
where it only means that smaller amount of asset cost was allocated to depreciation cost.
C.
Units-of-Production method traced the wear and tear on the machine cost adequately, as it was
charged on the basis of production conducted by the machine.
D.
Year Straight-Line Double-Declining Balance
2018 $320,000
2019 $80,000
2020 $80,000
$160,000 + $320,000 = $480,000

ACCT 1211: Accounting I A9-3

A9-4 Assignment 9
Question 2
(25 marks)
General Journal
DATE
2018
ACCOUNT TITLES AND
EXPLANATIONS
POST.
REF. DEBIT CREDIT
Feb 01 Purchases $10,000
To Cash $10,000
Feb 08 Repair expense-Equipment $3,000
To Cash $3,000
Feb 09 Modification expense-Equipment $2,000
To Cash $2,000
Oct 20 Maintenance $600
To Cash $600
Dec 31 Amortization expense $2,000
Accumulated Depreciation Equipment $2,000