Questions: At December 31, 2023, Halifax Servicing's balance sheet showed capital asset information as detailed in the schedule below. Halifax calculates depreciation to the nearest whole month. There have been no disposals or betterments since the date of purchase. Actual kilometres driven were: 2023,14,000 ; 2024,68,000. Required: Complete the schedule. (Do not round intermediate calculations. Round the final answers to the nearest whole dollars.) Cost information Depreciation Description Date of Purchase Depreciation Method Cost1 Residual Life Balance of Accum. Deprec. Dec. 31, 2023 Depreciation Expense for 2024 Balance of Accum. Deprec. Dec. 31, 2024 Office Equip. March 27/20 Straight-line 54,000 10,000 10 yr. ? ? Machinery June 4/20 Double-declining-balance 220,000 20,000 6 yr. ? Truck Nov. 13/23 Units-of-production 99,000 13,000 400,000 sq. km ?

Solution Steps

To complete the schedule, we need to calculate the depreciation for each asset using the specified method. For the office equipment, we use the straight-line method, which involves subtracting the residual value from the cost and dividing by the useful life. For the machinery, we use the double-declining-balance method, which involves doubling the straight-line rate and applying it to the book value. For the truck, we use the units-of-production method, which involves calculating the depreciation per unit and multiplying by the actual units used.

The office equipment uses the straight-line depreciation method. The formula for straight-line depreciation is:

\[ \text{Depreciation Expense} = \frac{\text{Cost} - \text{Residual Value}}{\text{Useful Life}} \]

Given:

• Cost = \$54,000
• Residual Value = \$10,000
• Useful Life = 10 years

The accumulated depreciation by December 31, 2023, is:

\[ \text{Accumulated Depreciation (2023)} = \frac{54,000 - 10,000}{10} \times (2023 - 2020) = 13,200 \]

The depreciation expense for 2024 is:

\[ \text{Depreciation Expense (2024)} = \frac{54,000 - 10,000}{10} = 4,400 \]

The accumulated depreciation by December 31, 2024, is:

\[ \text{Accumulated Depreciation (2024)} = 13,200 + 4,400 = 17,600 \]

The machinery uses the double-declining-balance method. The formula is:

\[ \text{Depreciation Expense} = 2 \times \left(\frac{\text{Book Value}}{\text{Useful Life}}\right) \]

Given:

• Cost = \$220,000
• Residual Value = \$20,000
• Useful Life = 6 years

The accumulated depreciation by December 31, 2023, is calculated iteratively for each year from 2020 to 2023. The book value at the end of 2023 is approximately \$43,456.79, and the accumulated depreciation is approximately \$176,543.21.

The depreciation expense for 2024 is:

\[ \text{Depreciation Expense (2024)} = 2 \times \left(\frac{43,456.79}{6}\right) \approx 14,485.60 \]

The accumulated depreciation by December 31, 2024, is:

\[ \text{Accumulated Depreciation (2024)} = 176,543.21 + 14,485.60 \approx 191,028.81 \]

The truck uses the units-of-production method. The formula is:

\[ \text{Depreciation Expense} = \left(\frac{\text{Cost} - \text{Residual Value}}{\text{Total Units}}\right) \times \text{Units Used} \]

Given:

• Cost = \$99,000
• Residual Value = \$13,000
• Total Units = 400,000 km

The depreciation per kilometer is:

\[ \text{Depreciation per km} = \frac{99,000 - 13,000}{400,000} = 0.215 \]

The accumulated depreciation by December 31, 2023, is:

\[ \text{Accumulated Depreciation (2023)} = 0.215 \times 14,000 = 3,010 \]

The depreciation expense for 2024 is:

\[ \text{Depreciation Expense (2024)} = 0.215 \times 68,000 = 14,620 \]

The accumulated depreciation by December 31, 2024, is:

\[ \text{Accumulated Depreciation (2024)} = 3,010 + 14,620 = 17,630 \]

Final Answer