Question

Your company just bought a new piece of equipment to manufacture widgets. It has a cost basis of​ $275,000, a useful life of 13​ years, and no salvage value. If the asset is depreciated using a​ 150% declining balance with straight line switchover​ method, answer the following​ questions:

​a) How much does the value depreciate in Year​ 1?

​b) How much does the value depreciate in Year​ 2?

​c) What is the book value at the end of Year​ 4?

​d) How much does the value depreciate in Year​ 10?

​e) In which year does the switchover occur​ (what is the first year of straight line​ depreciation)?

Answer 1

Ans : 150% declining balance method ,

so rate of Depreciation = 150%/13 years

= 11.54%

The Full table for Depreciation is below :

we considered year started from 2001:-

now we answered questions from above table:-

(A) $31731 (rounded) is Depreciated in year 1 (see table)

(B) $28070 (rounded) is deprecated in year 2 (see table)

(C) The book value at the end of year 4 is $168403 (rounded) (see table)

(D) value depreciated in year 10 is $10526 (see table)