1. Consider the depreciation of a $5,000 asset with $0 salvage value and a 5-year service...

1. Consider the depreciation of a $5,000 asset with $0 salvage value and a 5-year service life. Develop the complete depreciation schedules for the asset showing year-by-year depreciation charges and book values, using:

(a) DB with 20% depreciation rate

(b) 150% DB depreciation.

Expert Solution

(a)

	Beginning Book Value	Depreciation 20%	Acc. Depreciation	Ending Book Value
Year 1	$ 5,000	$ 1,000	$ 1,000	$ 4,000
Year 2	$ 4,000	$ 800	$ 1,800	$ 3,200
Year 3	$ 3,200	$ 640	$ 2,440	$ 2,560
Year 4	$ 2,560	$ 512	$ 2,952	$ 2,048
Year 5	$ 2,048	$ 410	$ 3,362	$ 1,638

(b)

	Beginning Book Value	Depreciation 30%	Acc. Depreciation	Ending Book Value
Year 1	$ 5,000	$ 1,500	$ 1,500	$ 3,500
Year 2	$ 3,500	$ 1,050	$ 2,550	$ 2,450
Year 3	$ 2,450	$ 735	$ 3,285	$ 1,715
Year 4	$ 1,715	$ 515	$ 3,800	$ 1,200
Year 5	$ 1,200	$ 360	$ 4,160	$ 840

ekkarill92 answered 1 year ago

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