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Sagot :
Answer:
Part a
2021 = $7,000
2022 = $6,000
Part b
2021 = $5,250
Explanation:
Sum of the year`s digit method provide for higher depreciation in early life of the asset with lower depreciation in later years.
Step 1
Some of digits calculation :
Year Digits
2021 7
2022 6
2023 5
2024 4
2025 3
2026 2
2027 1
Total 28
Step 2
Determine the depreciable amount
Depreciable amount = Cost - Residual value
= $40,000 - $12,000
= $28,000
Step 3
Depreciation expense calculations
2021 = 7 / 28 x $28,000 = $7,000
2022 = 6/ 28 x $28,000 = $6,000
assuming the equipment was purchased on March 31, 2021
2021 = $7,000 x 9/12 = $5,250
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