Question

Cutter Enterprises purchased equipment for $84,000 on January 1, 2018. The equipment is expected to have a five-year life and a residual value of $6,300. Using the double-declining balance method, the book value at December 31, 2019, would be:

Answer 1

solution = 1 40% The percentage of depreciation (100%/5) x2 Depreciation for 2018, the first year with hay year Convention => 40%/2 = Depreciation for 2018 — 84000 X 20% = 2007 16800 Book value on December 31, 84000 - 16800 = 67200 with full year convention the figures would be as below: the percentage of depreciation (100%/5) x2 = 1 40% Depreciation for 2018, the first year will full = 1 407. Year Convention Depreclation for 2018 - 84000 x 40% 33600 Book value on December 31 84000 33600 50400 * Double Declening Method can have full year convention, half year Convention and so one