Question 2 On January 3, 2010, DL LLC purchased a truck for long-distance deliveries in Europe...

Question 2

On January 3, 2010, DL LLC purchased a truck for long-distance deliveries in Europe

The acquisition cost of the truck amounts to $ 100,000.

The truck is expected to have a salvage value of $20,000 at the end of 8-year useful life.

Task: Prepare a depreciation schedule for the truck using the diminishing balance method.

Expert Solution

Diminishing balance method depreciation for each year is calculated using MS excel formula “=DB()”
Syntax to be used: =DB(100000,20000,8,Year)
Depreciation Schedule

Year	Beginning Book Value	Depreciation Expenses	Ending Book Value	Accumulated Depreciation
2010	$ 100,000	$ 18,200	$ 81,800	$ 18,200
2011	$ 81,800	$ 14,888	$ 66,912	$ 33,088
2012	$ 66,912	$ 12,178	$ 54,734	$ 45,266
2013	$ 54,734	$ 9,962	$ 44,773	$ 55,227
2014	$ 44,773	$ 8,149	$ 36,624	$ 63,376
2015	$ 36,624	$ 6,666	$ 29,958	$ 70,042
2016	$ 29,958	$ 5,452	$ 24,506	$ 75,494
2017	$ 24,506	$ 4,460	$ 20,046	$ 79,954

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