Various Depreciation Methods-First Year
on 5 September 2013, Apollo Purchased

question 97

Essay

Various depreciation methods-first year
On 5 September 2013, Apollo purchased equipment costing $40,000, with an estimated life of 6 years and an estimated salvage value of $4,000.
Compute the depreciation expense Apollo would recognize on this equipment in 2010 assuming: $$\begin{array}{|l|l|}\hline \text { (a) Straight-line depreciation with fractional periods rounded }\\\begin{array} { l| } \hline \text { to the nearest full month } &\$\underline{\quad\quad}\\\hline \text { (b) } 200 \% \text {-declining-balance, using the half-year convention } &\$\underline{\quad\quad}\\\hline\text { (c) } 150 \% \text {-declining-balance with fractional periods rounded } \\\hline \text { to the nearest full month }&\$\underline{\quad\quad}\\\hline \end{array}\end{array}$$

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Definitions:

Discretionary Policy

Discretionary Policy involves the deliberate use of monetary or fiscal policy changes by government policymakers to address economic issues.

Monetary Policy

Actions undertaken by a central bank to control the supply of money and interest rates in its economy.

Fiscal Policy

Government policies related to taxation and government spending to influence the economy.

Lags

Lags refer to the delay between the implementation of economic policy or action and its actual effect on the economy, often observed in fiscal and monetary policies.