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 2 years ago

Double-Declining-Balance Depreciation A small delivery truck was purchased on January 1 at a cost of $29,600....

Double-Declining-Balance Depreciation A small delivery truck was purchased on January 1 at a cost of $29,600. It has an estimated useful life of four years and an estimated salvage value of $5,920. Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the double-declining-balance method. If an amount box does not require an entry, leave it blank. Small Delivery Truck Depreciation Schedule On January 1 Year Book Value Beginning of Year x Rate...

1) A change from straight line depreciation to double declining balance depreciation is an example of...

1) A change from straight line depreciation to double declining balance depreciation is an example of a change in an accounting principle. (answer True or False) 2) When preparing a statement of cash flows (indirect method), a sale of equity securities is an investing activity. (answer True or False)

7) What SUP Partial Year Double Declining Balance Depreciation for Asset 1004 Create a new worksheet...

7) What SUP Partial Year Double Declining Balance Depreciation for Asset 1004 Create a new worksheet to calculate depreciation for a table purchased on August 1, 2017, for $95,000. It has an estimated salvage value of $2,000 and is to be depreciated over 10 years using the double declining balance method. Follow the same process used in the chapter to calculate depreciation for partial periods.

Using the double-declining balance method, calculate the annual depreciation expense that will be recorded each year...

Using the double-declining balance method, calculate the annual depreciation expense that will be recorded each year for an asset that cost $18,000, has a useful life of four years, and has an estimated salvage value of $3,600. Explain what accounting issue arises, if any, in the third and fourth years. Determine the depreciable cost. Cost -. Salvage value = Depreciable cost - = Complete the depreciation schedule using the double-declining balance method. (Complete all input boxes.) Book Annual Accumulated Year...

Calculate the double-declining balance depreciation schedule for a $1,000 item that will last four years. What...

Calculate the double-declining balance depreciation schedule for a $1,000 item that will last four years. What is the estimated salvage value?

given equipment cost $100,000 life 4years method of depreciation double declining balance record the entry when...

given equipment cost $100,000 life 4years method of depreciation double declining balance record the entry when purchased if the equipment was purchased for cash cash I the equipment is used for 6years and the disposed record the entry for this transaction cashII the equipment is sold at the end of 3years for $15,000 record the entry for this transaction cashII the equipment is solf at the end of 3years for $15,000 record the entry for this transaction

4) Double-declining-balance depreciation: A) is an accelerated depreciation method. B) ignores the residual value in computing...

4) Double-declining-balance depreciation: A) is an accelerated depreciation method. B) ignores the residual value in computing depreciation, except during the last year. C) is based on the book value of the plant asset. D) is all of the above. 5) All of the following are needed to measure depreciation, EXCEPT for: A) cost. B) market value. C) estimated useful life. D) estimated residual value. 6) A depreciation method in which an equal amount of depreciation expense is assigned to each...

Question 1 (1 point) Straight-Line depreciation and Double-Declining-Balance depreciation result in the same Accumulated Depreciation at...

Question 1 (1 point) Straight-Line depreciation and Double-Declining-Balance depreciation result in the same Accumulated Depreciation at the end of the asset's useful life. Question 1 options: True False Question 2 (1 point) If a company makes a journal entry to record a PP&E Impairment, the entry will cause: Question 2 options: Total Assets to Decrease Net Income to Increase Total Assets to Increase Total Liabilities to Increase Question 3 (1 point) We depreciate Land unless it contains natural resources. Question...

Cost $45,000; Salvage value:0; Useful life: 8 Calculate annual depreciation on this machinery using double-declining balance...

Cost $45,000; Salvage value:0; Useful life: 8 Calculate annual depreciation on this machinery using double-declining balance method. Be careful not to exceed the salvage value. If the salvage value is zero, switch to straightline in the year when straight-line yields higher depreciation. (use the remaining value as the starting point when you change)

Why might a corporation prefer double-declining balance as its method of depreciation? Why is the effective...

Why might a corporation prefer double-declining balance as its method of depreciation? Why is the effective interest rate method of amortizing bond discount and premium accepted as GAAP rather than straight-line method?

Question