what is the amount of double declining balance depreciation for year five if the cost of...

what is the amount of double declining balance depreciation for year five if the cost of an asset is $75,000 do useful life is five years in a salvage value is $4000

Expert Solution

Calculation of depreciation expense for year five using Double-declining balance method is as follows:

Year	Beginning Book Value	Rate (Working Note)	Depreciation Expense	Accumulated Depreciation	Ending Book Value
(i)	(ii)	(iii)	*(iv)[(ii)(iii)]**	(v)	(vi)[(ii)-(iv)]
1	$ 75,000	40%	$ 30,000	$ 30,000	$ 45,000
2	$ 45,000	40%	$ 18,000	$ 48,000	$ 27,000
3	$ 27,000	40%	$ 10,800	$ 58,800	$ 16,200
4	$ 16,200	40%	$ 6,480	$ 65,280	$ 9,720
5	$ 9,720	40%	$ 3,888	$ 69,168	$ 5,832

As per above statement,

Depreciation expense for year five using Double-declining balance method is $ 3,888.

Working Note:

Calculation of Rate of Depreciation under Double declining balance method is as follows:

Rate of Depreciation under Double declining balance method = 2 * Depreciation rate

= 2 * 20

= 40%

Thus, Rate of Depreciation under Double declining balance method is 40%

Depreciation Rate = (1 / Estimated Useful life) * 100 '

= ( 1/ 5 ) * 100

= 20%

ekkarill92 answered 1 year ago

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