On January 1, 2016, Friedman Company purchased a truck that cost $48,000. The truck had an expected useful life of 8 years and an $8,000 salvage value. The book value of the truck at the end of 2016, assuming that Friedman uses the double declining balance method, is:
$38,000.
$38,400.
$32,000.
$36,000.
Purchased Cost as on 1st Jan, 2016 | 48,000 |
Salvage Value | 8,000 |
Depreciable Value | 40,000 |
Useful Life (in Years) | 8 |
Annual Depreciation (SLM) | 5,000 |
Depreciation Rate (SLM) | 10.42% |
Double Depreciation Rate | 20.83% |
Depreciation for 1st year | 10,000 |
Book value at the end of first year (i.e. 31st Dec, 2016) | 38,000 |
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