A method that excludes residual value from the base for the depreciation calculation is
a. Straight line
b. Sum of the years’ digits
c. Double declining balance
d. Productive output
Vorst Corporation’s schedule of depreciable assets at December 31, 2007 was as follows:
|
Asset |
Cost |
Accumulated Depreciation |
Acquisition Date |
Residual Value |
|
A |
$100,000 |
$64,000 |
2006 |
$20,000 |
|
B |
55,000 |
36,000 |
2005 |
10,000 |
|
C |
70,000 |
33,600 |
2005 |
14,000 |
|
$225,000 |
$133,600 |
$44,000 |
Vorst takes a full year’s depreciation expense in the year of an asset’s acquisition, and no depreciation expense in the year of an asset’s disposition. The estimated useful life of each depreciable asset is five years.