kansas enterprises purchased equipment for 81,500 on January 1,2021. the equipment is expected to have a...

kansas enterprises purchased equipment for 81,500 on January 1,2021. the equipment is expected to have a five - year service life, with a residual value of 8,250 at the end of five years. using the double- declining balance method, depreciation expense for 2021 would be

Expert Solution

CALCULATION OF THE DEPRECIATION AS PER DOUBLE DECLINING METHOD
Purchase Cost of Equipment	$ 81,500
Useful Life (Years) =	5
Residual Value of Equipment	$ 8,250
Depreciation per year as per SLM =(1 / 5 Years)	0.20

So the depreciation per year as per SLM =	20.0%
But, As per the double decline method = (20.0% X 2)	40%

Rate of Depreciation =	0.40 or 40%


CACLULATION OF THE DEPRECIATION FOR THE YEAR 2021

Assets Value =	$ 81,500
Less : Residual Value of Equipment	$ 8,250
Depreciable Value of Equipment	$ 73,250
Less : Depreciation for the year 2021 @ 40% on depreciable Value of Equipment	$ 29,300

Closing Book Value for the year 2021 =	$ 52,200

ekkarill92 answered 2 years ago

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