Surplus Warehouse purchased a forklift on January 1, 2016, for $12,000. The forklift is expected to...

Surplus Warehouse purchased a forklift on January 1, 2016, for $12,000. The forklift is expected to last for five years and have a residual value of $1,200. Surplus Warehouse uses the double-declining-balance method for depreciation.

a. Calculate the depreciation expense, accumulated depreciation, and book value for each year of the forklift’s life. Round any depreciation calculations to the nearest dollar.

Year	Annual Depreciation	Accumulated Depreciation	Book Value
2016	$	$	$
2017
2018
2019
2020

Expert Solution

Rate of depreciation per year=	2/useful life *100

useful life (in years)	5


Rate of depreciation per year=	40%

Year	Gross block	Net book value opening	Ac Dep opening	Dep expense	Ac Dep closing	Net book value closing
	a	b	c	d	e=c+d	f=a-e
2016	12,000.00	12,000.00	-	4,800.00	4,800.00	7,200.00
2017	12,000.00	7,200.00	4,800.00	2,880.00	7,680.00	4,320.00
2018	12,000.00	4,320.00	7,680.00	1,728.00	9,408.00	2,592.00
2019	12,000.00	2,592.00	9,408.00	1,036.80	10,444.80	1,555.20
2020	12,000.00	1,555.20	10,444.80	622.08	11,066.88	933.12

jeff jeffy answered 2 years ago

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