Question
In: Accounting
A Kubota tractor acquired on January 8 at a cost of $225,000 has an estimated useful...
A Kubota tractor acquired on January 8 at a cost of $225,000 has an estimated useful life of 10 years. Assuming that it will have no residual value. a. Determine the depreciation for each of the first two years by the straight-line method. First Year Second Year $fill in the blank 1 $fill in the blank 2 b. Determine the depreciation for each of the first two years by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your final answers to the nearest dollar
Solutions
Expert Solution
A)Straight line method :
Depreciation expense =[COst -residual value ]/useful life
= [225000 -0 ]/10
= 22500
| Year | Depreciation expense using straight line method |
| 1 | 22500 |
| 2 | 22500 |
B)Double declining Balance method :
Depreciation rate = 2/useful life
= 2/10
= .20 or 20%
| Year | Depreciation expense | carrying value |
| 1 | 225000*20%=45000 | 225000-45000=180000 |
| 2 | 180000*20%= 36000 | 180000-36000=144000 |
ekkarill92 answered 1 year agoRelated Solutions
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