Question

Calculate 1,000,000 of investment to be deprecated over 6 years using Declining Balance Depreciation method and declining balance rate of 180%. Show your work in detail please.

Answer #1

(Assuming Values as ($) and No Salvage Value Provided for the given investment

Investment Cost: 10,00,000.00

Salvage Value: 0

Life: 6 Years

Declining Balance Rate: 180% therefore, the depreciation factpor
is taken as **(1.8)**

Note:

The depreciation factor is used to calculate the depreciation rate per year. since the given double declining depreciation is 180%, the factor is taken as 1.8.

Under Stright Line Method (SLM), the 6 year life means, the asset's annual depreciation will be 6% of the asset's cost. Under Double Declining Balance Method of calculating the depreciation, the 6% stright line rate is doubled to 12%.

The calculation of depreciation for the given data is as follows:

At the end of the year, the value of the investment is around $4,64,404.00 after reducing ythe depreciation amounts.

Thank You.

Using the Double Declining Balance method to calculate
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a. Depreciation is calculated
taking the cost excluding salvage value, divided by the number of
years of anticipated service, and multiplying by 2.
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using the cost divided by the number of estimated years of service,
multiplying by 2, posting this amount, and recalculating the
depreciation annually based on the balance left each year until the
only balance is the salvage...

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(b) the Depreciation charge, D=?, at the end of
year 2, and (c) the Book Value, BV=?, at the end
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Declining Balance Method
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The life of the asset: 5 years
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555.)
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method.
straight line
sum-of-the-years-digits
double declining balance
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An equipment at MNS Systems costing $600,000 was depreciated
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