Answer:
2021 2022
1. Straight line $27,500 $27,500
2. Sum-of-the-years-digits $50,000 $45,000
3. Double-declining balance $$55,600 $44,480
Step-by-step explanation:
1.
Straight Line depreciation is a method of depreciation in which the cost of the asset net of residual value is divided over useful life.
To calculate the depreciation we use following formula
Depreciation = ( Cost of Asset - Salvage Value ) / Useful life
Placing values in the formula
Depreciation = ( $278,000 - $3,000 ) / 10 years = $27,500
2.
In sum of years digits we add the all the digits up to the maturity period of asset and calculate the ratio / percentage of each year to the depreciable amount of asset
Depreciable value of asset = $278,000 - $3,000 = $275,000
useful life = 10 years
Sum of Digits = 1+2+3+4+5+6+7+8+9+10 = 55
another method
Sum of Digits = n ( n + 1 ) / 2 = 10 ( 10 + 1 ) / 2 = 55
2021
Total useful life remaining = 10 years
Depreciation = $275,000 x 10/55 = 50,000
2022
Total useful life remaining = 9 years
Depreciation = $275,000 x 9/55 = 45,000
3.
Double declining method
The Accelerated depreciation is charged in this method. The depreciation charged in this method is double of the charged in straight-line depreciation method.
Depreciation rate = 2 x (1/useful life) x100 = 2 x (1/10 years) x100 = 20%
2020
Depreciation = Depreciable Value x 20% = $278,000 x 20% = $55,600
2021
Carrying Value = 278,000 - $55,600 = 222,400
Depreciation = Carrying Value x 20% = $222,400 x 20% = $44,480