Question

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 (%) =	Depreciation Expense	Accumulated Depreciation End of Year	Book Value End of Year
1	$		$	$	$
2
3
4

Answer 1

• Workings

A	Cost	$            29,600.00
B	Residual Value	$              5,920.00
C=A - B	Depreciable base	$            23,680.00
D	Life [in years]	4
E=C/D	Annual SLM depreciation	$              5,920.00
F=E/C	SLM Rate	25.00%
G=F x 2	DDB Rate	50.00%

• Answer

Small Delivery Truck
Depreciation Schedule
On January 1
Year		Rate (%) =	Depreciation Expense	Accumulated Depreciation
				End of Year
	Book Value				Book Value
	Beginning of Year x				End of Year
1	$29,600	50%	$14,800	$14,800	$14,800
2	$14,800	50%	$7,400	$22,200	$7,400
3	$7,400		$1,480 [7400 – 5920]	$23,680	$5,920
4	$5,920		$0	$23,680	$5,920
			$23,680