Question

Tidy Limited purchased a new van on January 1, 2018. The van cost $50,000. It has...

Tidy Limited purchased a new van on January 1, 2018. The van cost $50,000. It has an estimated life of ten years and the estimated residual value is $5,500. Tidy uses the double-declining-balance method to compute depreciation.

What is the adjusted balance in the Accumulated Depreciation account at the end of 2019?

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Answer #1

Answer-------------$18,000

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Double declining Method
A Cost $ 50,000
B Residual Value $ 5,500
C=A - B Depreciable base $ 44,500
D Life [in years] 10
E=C/D Annual SLM depreciation $ 4,450
F=E/C SLM Rate 10.00%
G=F x 2 DDB Rate 20.00%

..

Depreciation schedule-Double declining
Year Beginning Book Value Depreciation rate Depreciation expense Accumulated Depreciation Ending Book Value
2018 $ 50,000 20.00% $ 10,000 $ 10,000 $ 40,000
2019 $ 40,000 20.00% $ 8,000 $ 18,000 $ 32,000
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