Compute the depreciation and book value each year of a machine that costs $67,000 topurchase and $3,000 to install with an 8-year life. Use the sum-of-years-digits method.

                                          Depreciation                      Book Value

                                              for year                             after year

                                                  $                                           $

Year 1 -                                   15,556                                 54,444

Year 2                                     13,611                                   40,833                                  

Year 3                                     11.667                                   29,667

Year 4                                      9,722                                   19,444

Year 5                                      7,778                                    11,667

Year 6                                      5,833                                     5,833

Year 7                                       3,889                                     1,944

Year 8                                       1,944                                           0

Explanation:

Computation of yearly depreciation using sum of the years method

Cost of equipment                                                                $ 67,000

Installation cost                                                                     $   3,000

Depreciable cost                                                                  $ 70,000

In a sum of the years method the mo of years are summed up and then depreciation  is applied with the highest number first.

Sum of the years = (1+2+3+4+5+6+7+8) = 36

Depreciable basis                                                                 $  70,000

Depreciation for year 1 = 8/36* 70,000                               $ (15,556)

Book value after year 1                                                          $ 54,444

Depreciation for year 2 = 7/36* 70,000                               $ (13,611)

Book value after year 2                                                          $ 40,833

Depreciation for year 3 = 6/36* 70,000                               $  (11,667)

Book value after year 3                                                          $ 29,667

Depreciation for year 4 = 5/36* 70,000                               $  ( 9.722)

Book value after year 4                                                          $ 19,444

Depreciation for year 5 = 4/36* 70,000                               $   (7,778)

Book value after year 5                                                        $    11,667

Depreciation for year 6 = 3/36* 70,000                               $   (5,833)

Book value after year 6                                                        $    5,883

Depreciation for year 7 = 4/36* 70,000                               $   (3,889)

Book value after year 7                                                        $    1,944

Depreciation for year 8 = 1/36* 70,000                               $   (1,944)

Book value after year 8                                                        $    0

Year 1: Depreciation expense = $15,556

Year 2: Depreciation expense = $13,611

Year 3: Depreciation expense = $11,667

Year 4: Depreciation expense = $9,722

Year 5: Depreciation expense = $7,778

Year 6: Depreciation expense = $5,833

Year 7: Depreciation expense = $3,889

Year 8: Depreciation expense = $1,944

Explanation:

Step 1: Calculation of machine depreciable cost

Depreciable cost of machine =  $67,000 + $3,000 = $70,000

Step 2: Calculation of sum of the year's digit

Sum of the year's digit = (1 + 2 + 3 + 4 + 5 + 6 + 7 + 8) = 36

Step 3: Computation of depreciation

The following formula will be used:

Depreciation expenses = (Remaining useful asset life ÷ Sum of the year's digit) × machine depreciable cost

Net book value for the current year = Net book value for the previous year - Depreciation expenses for the current year

The calculation now proceeds as follows:

Machine depreciable cost = $70,000

Year 1: Depreciation expense = [(8 ÷ 36) × 70,000) = $15,556

Year 1: Net book value = $70,000 - $15,556  = $54,444

Year 2: Depreciation expense = [(7 ÷ 36) × 70,000) = $13,611

Year 2: Net book value = $54,444  - $13,611   = $40,833

Year 3: Depreciation expense = [(6 ÷ 36) × 70,000) = $11,667

Year 3: Net book value = $40,833  - $11,667   = $29,667

Year 4: Depreciation expense = [(5 ÷ 36) × 70,000) = $9,722

Year 4: Net book value = $29,667  - $9,722 = $19,444

Year 5: Depreciation expense = [(4 ÷ 36) × 70,000) = $7,778

Year 5: Net book value = $19,444 - $7,778 = $11,667

Year 6: Depreciation expense = [(3 ÷ 36) × 70,000) = $5,833

Year 6: Net book value = $11,667 - $5,833  = $5,833

Year 7: Depreciation expense = [(2 ÷ 36) × 70,000) = $3,889

Year 7: Net book value = $5,833 - $3,889  = $1,944

Year 8: Depreciation expense = [(1 ÷ 36) × 70,000) = $1,944

Year 8: Net book value = $1,944 - $1,944  =  $0

It can be seen that the asset becomes fully depreciated and its value become zero after year 8.

b. a single paragraph.

a paragraph is a series of sentences that are organized and make sense, and are all related to a single topic . almost every piece of writing you do that is longer than a few sentences should be organized into paragraphs. this is because paragraphs show a reader where the subdivisions of an essay begin and end, and thus the reader see the organization of the essay into subjects in order to be able to understand its main points.