Asked by Mckay Hilton on Jun 21, 2024

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Explain in detail how to compute each of the following depreciation methods: straight-line,units-of-production,and double-declining-balance.

Units-Of-Production

A depreciation method that allocates the cost of an asset based on its usage, production, or units of output over its useful life.

Double-Declining-Balance

A method of accelerated depreciation that applies a constant rate of depreciation to a declining book value, resulting in higher depreciation expense in the early years of the asset's life.

Straight-Line

A method of depreciation that allocates the cost of an asset evenly over its useful life, reflecting a constant rate of expense over each period.

  • Absorb the methodology for computing the depreciation expense via diverse approaches encompassing straight-line, double-declining balance, and units-of-production.
  • Describe and compare different depreciation methods in terms of expense distribution over the asset's life.
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Breonna WilliamsJun 24, 2024
Final Answer :
Straight-line depreciation is calculated by subtracting salvage value from the cost of the plant asset and then dividing the result by the useful life.When useful life is measured in years,the resulting amount is the annual depreciation expense for the asset.
Units-of-production depreciation is calculated by subtracting salvage value from the cost of the plant asset and then dividing the result by the useful life in units.The resulting amount is the depreciation expense per unit.That amount is multiplied by the number of units produced during each accounting period to determine the total amount of depreciation expense for that period.
The double-declining-balance method uses twice the straight-line rate (100%/useful life in years)multiplied by the beginning-of-period book value of the asset.The resulting amount is the depreciation expense for that period.