Question

A depreciable asset is purchased for $50,000. The expected salvage value is zero at the end...

A depreciable asset is purchased for $50,000. The expected salvage value is zero at the end of it’s 8 year useful life. Compute the depreciation schedule by using double declining balance (DDB) to switch over straight line depreciation. Also, determine the book value of the asset after 6 years.

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Answer #1

Depreciation rate = 1/estimated life * 2

= 1/8 * 2

= 25%

Book value at the end of 6th year = $ 8,888

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