Question

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.

Answer #1

Depreciation rate = 1/estimated life * 2

= 1/8 * 2

= 25%

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

An asset will cost $1,750 when purchased this year. It is
further expected to have a salvage value of $250 at the end of its
five year depreciable life. Calculate complete depreciation
schedules giving the depreciation charge, D(n), and
end-of-year book value, B(n), for straight-line (SL), Declining
Balance (DB) with a rate of d=0.25, double declining balance (DDB),
and modified accelerated cost recovery (MACRS) depreciation
methods. Assume a MACRS recovery period of 5 years with the
following depreciation rates.
Year...

"Compute the book value at the end of 4 years using
double-declining-balance (DDB) depreciation schedule for the
following asset: Cost of the asset, I: $300,000. Useful life, N: 8
years. Salvage value, S: $34,000."

"Compute the book value at the end of 5 years using
double-declining-balance (DDB) depreciation schedule for the
following asset:
Cost of the asset, I: $298,000.
Useful life, N: 7 years.
Salvage value, S: $35,000."

Double Declining Balance Method -- Commercial Lawn Mower:
Acquired January 1. Purchased for $14,000; salvage value is $2,000.
Useful life is 5 years.
A. Is the salvage value used to compute book value (circle the
answer)? Yes or No
B. How is the double declining rate computed?
C.Complete the following Double Declining Balance Table:
Year
Book Value: Start of Year
DDB Percent
Annual Depreciation Expense
Accumulated Depreciation
Book Value: End of Year
Year 1
Year 2
Year 3
Year 4...

Beckman Enterprises purchased a depreciable asset on October
1, Year 1 at a cost of $100,000. The asset is expected to have a
salvage value of $20,000 at the end of its five-year useful life.
If the asset is depreciated on the double-declining-balance method,
the asset's book value on December 31, Year 2 will be:
Select one:
a. $54,000
b. $16,000
c. $42,000
d. $36,000

Colvin Enterprises purchased a depreciable asset on October 1,
Year 1 at a cost of $100,000. The asset is expected to have a
salvage value of $20,000 at the end of its five-year useful life.
If the asset is depreciated on the double-declining-balance method,
the asset’s depreciation expense in Year 2 will be:
A) 90000
B) 54000
C) 42000
D) 16000
E) 36000

E 9-3A.
Depreciation Methods
A delivery truck costing $20,000 is
expected to have a $2,000 salvage value at the end of its useful
life of four years of 100,000 miles. Assume that the
truck was purchased on January 2. Calculate the
depreciation expense for the second year using each of the
following depreciation methods: (a) straight-line, (b)
double-declining balance, and (c)
units-of-production. (Assume that the truck was driven
30,000 miles in the second year.)
a.
Straight-line depreciation =
(Acquisition Cost - Salvage value)...

On January 1, 2018, Algo Company purchased a truck for $50,000.
Salvage value is expected to be $5,000. The truck's useful life is
expected to be 5 year. The company uses the straight-line
depreciation expense method to record depreciation. What is the
truck's December 31, 2019 net book value after the recording of the
2019 depreciation expense?

Deuce Company purchased a truck for $80,000 on January 1,
2018. The asset has an expected salvage value of
$8,000 at the end of its five-year useful life.
Calculate depreciation expense in 2019
(the second year) under:
Straight-line depreciation? (2 points)
Double-declining balance depreciation? (3 points)
Sum-of-years digits depreciation? (3 points)

It is expected that a small water pump will cost $2020 when
purchased in 2003. It is further expected to have a salvage value
of $520 at the end of its five year depreciable life. Calculate
manually complete depreciation schedules giving the depreciation
charge, and end-of-year book value for:
a) Straight line method
b) Sum-of-the-years digit method
c) Double declining balance method

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 3 minutes ago

asked 6 minutes ago

asked 13 minutes ago

asked 17 minutes ago

asked 31 minutes ago

asked 43 minutes ago

asked 47 minutes ago

asked 47 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago