Question

"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."

Answer 1

DDB method ignores salvage value.

Straight-line method (SLM) depreciation rate = 1/Useful life = 1/8 = 0.125

DDB depreciation rate = 2 x SLM rate = 2 x 0.125 = 0.5

DDB depreciation schedule as follows.

DDB Depreciation Schedule
Year	Beginning-of-year Book Value ($)	Depreciation Rate	Annual Depreciation ($)	End-of-Year Book Value ($)
1	3,00,000	0.25	75,000	2,25,000
2	2,25,000	0.25	56,250	1,68,750
3	1,68,750	0.25	42,188	1,26,563
4	1,26,563	0.25	31,641	94,922