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:

Premium

An amount paid for an insurance policy or an amount over the regular price for enhanced or additional features or services.

Insurance Policy

A contract between an individual or entity and an insurance company, outlining coverage terms and conditions for specific risks.

Expected Value

The calculated average of all possible outcomes of a random variable, weighted by their probabilities.

Uncertain Income

Income that is not guaranteed and can fluctuate due to various factors such as business cycles, seasonal work, or freelancing.