text: # Chap11Answers_to_Suggested_Problems - Chapter 11 -...
  
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  EXERCISES 1. Straight-line: \$33,000 - 3,000 = \$6,000 per year 5 years 2. Sum-of-the-years’ digits: Year Depreciable Base X Depreciation Rate per Year = Depreciation 2011 \$30,000 \$10,000 2012 30,000 8,000 2013 30,000 6,000 2014 30,000 4,000 2015 30,000 2,000 Total \$30,000 3. Double-declining balance: Straight-line rate of 20% (1 ÷ 5 years) x 2 = 40% DDB rate. Year Book Value Beginning of Year X Depreciation Rate per Year = Depreciation Book Value End of Year 2011 \$33,000 40% \$ 13,200 \$19,800 2012 19,800 40% 7,920 11,880 2013 11,880 40% 4,752 7,128 2014 7,128 40% 2,851 4,277 2015 4,277 * 1,277 * 3,000 Total \$30,000 Chapter 11 Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment Exercise 11-1 Exercise 11-1 (concluded) 11-1 Chapter 11 - Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment
  
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  * Amount necessary to reduce book value to residual value 4. Units-of-production : \$33,000 - 3,000 = \$.30 per mile depreciation rate 100,000 miles Year Actual Miles Driven X Depreciation Rate per Mile = Depreciation Book Value End of Year 2011 22,000 \$.30 \$6,600 \$26,400 2012 24,000 .30 7,200 19,200 2013 15,000 .30 4,500 14,700 2014 20,000 .30 6,000 8,700 2015 21,000 * 5,700 * 3,000 Totals 102,000 \$30,000 * Amount necessary to reduce book value to residual value 11-2 Chapter 11 - Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment
  Exercise 11-2 1. Straight-line: \$115,000 - 5,000 = \$11,000 per year 10 years 2. Sum-of-the-years’ digits: Sum-of-the-digits is ([10 (10 + 1)] ÷ 2) = 55 2011 \$110,000 x 10/55 = \$20,000 2012 \$110,000 x 9/55 = \$18,000 3. Double-declining balance: Straight-line rate is 10% (1 ÷ 10 years) x 2 = 20% DDB rate 2011 \$115,000 x 20% = \$23,000 2012 (\$115,000 - 23,000) x 20% = \$18,400 4. One hundred fifty percent declining balance: Straight-line rate is 10% (1 ÷ 10 years) x 1.5 = 15% rate 2011 \$115,000 x 15% = \$17,250 2012 (\$115,000 - 17,250) x 15% = \$14,663 5. Units-of-production: \$115,000 - 5,000 = \$.50 per unit depreciation rate 220,000 units 2011 30,000 units x \$.50 = \$15,000 2012 25,000 units x \$.50 = \$12,500 11-3 Chapter 11 - Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment
  
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  Exercise 11-3 1. Straight-line: \$115,000 - 5,000 = \$11,000 per year 10 years 2011 \$11,000 x 3/12 = \$ 2,750 2012 \$11,000 x 12/12 = \$11,000 2. Sum-of-the-years’ digits: Sum-of-the-digits is {[10 (10 + 1)]/2} = 55 2011 \$110,000 x 10/55 x 3/12 = \$ 5,000 2012 \$110,000 x 10/55 x 9/12 = \$15,000 + \$110,000 x 9/55 x 3/12 = 4,500 \$19,500 3. Double-declining balance: Straight-line rate is 10% (1 ÷ 10 years) x 2 = 20% DDB rate 2011 \$115,000 x 20% x 3/12 = \$5,750 2012 \$115,000 x 20% x 9/12 = \$17,250 + (\$115,000 - 23,000) x 20% x 3/12 = 4,600 \$21,850 or, 2012 (\$115,000 - 5,750) x 20% = \$21,850 4. One hundred fifty percent declining balance: Straight-line rate is 10% (1 ÷ 10 years) x 1.5 = 15% rate 2011 \$115,000 x 15% x 3/12 = \$ 4,313 2012 \$115,000 x 15% x 9/12 = \$12,937
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