help double declining depreciation

Discussion in 'General Accountancy Discussion' started by 5591, Nov 8, 2013.

  1. 5591

    5591

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    2013
    1. Acquired $80,000 cash from the issue of common stock.
    2.

    Purchased a computer system for $35,000. It has an estimated useful life of five years and a $5,000 salvage value.
    3. Paid $2,450 sales tax on the computer system.
    4. Collected $65,000 in fees from clients.
    5. Paid $1,500 in fees to service the computers.
    6. Recorded double-declining-balance depreciation on the computer system for 2013.
    7. Closed the revenue and expense accounts to Retained Earnings at the end of 2013.

    2014
    1. Paid $1,000 for repairs to the computer system.
    2. Bought off-site backup services to maintain the computer system, $1,500.
    3. Collected $68,000 in fees from clients.
    4. Paid $1,500 in fees to service the computers.
    5. Recorded double-declining-balance depreciation for 2014.
    6. Closed the revenue and expense accounts to Retained Earnings at the end of 2014.

    2015
    1.

    Paid $6,000 to upgrade the computer system, which extended the total life of the system to six years. The salvage value did not change.
    2. Paid $1,200 in fees to service the computers.
    3. Collected $70,000 in fees from clients.
    4. Recorded double-declining-balance depreciation for 2015.
    5. Closed the revenue and expense accounts at the end of 2015.

    so basically i am stuck on double declining depreciation for 2015


    for 2013 it would be 14980
    35000+2450=37450
    1/5=.2
    .2*2=.4 37450*.4=14980

    for 2014 it would be 8988
    37450-14980=22470
    22470*.4=8988

    so now I am stuck since in 2015 Paid $6,000 to upgrade the computer system, which extended the total life of the system to six years. The salvage value did not change.

    I have no idea what to do at this point bc the numbers have changed
     
    5591, Nov 8, 2013
    #1
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