Question
In: Economics
Equipment for immersion cooling of electronic components has an installed value of $182,000 with an estimated...
Equipment for immersion cooling of electronic components has an installed value of $182,000 with an estimated salvage value of $40,000 after 15 years. For years 2 and 10, use DDB book depreciation to determine: (a) the depreciation charge, and (b) the book value.
I want an explanation for the steps
Solutions
Expert Solution
Installed value = $ 182,000
Salvage value = $ 40,000 (after 15 years)
In case of DDB is twice of straight line depreciation.
Here the useful life is 15 years therefore under straight line method depreciation per year will be (1/15).
Under DDB the depreciation rate = (2/15)
Refer the attached picture
First year depreciation = (2/15)×182000 = $ 24266.67
BV end of year 1 = 182,000 - 24,266.67 = $ 157,733.33
BV beginning of year 2 = BV EOY 1 = $ 157,733.33
Depreciation. Year 2 =(2/15)*157,733.33 = 21,031.11
BV EoY 2 = 157,733.33 - 21031.11 = $ 136,702.11
Like this we can calculate for remaining years.
Please contact if having any query will be obliged to you for your generous support. Your help mean a lot to me,please help. Thank you.
Rahul Sunny answered 7 months agoRelated Solutions
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