Apr. 1: Acquired land and communication equipment in a lump-sum purchase. Total cost was $350,000 paid...

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Apr. 1: Acquired land and communication equipment in a lump-sum purchase. Total cost was $350,000 paid in cash. An independen

On January 1, 2010, a company purchased equipment for $38,840. The estimated useful life of the equipment was five years, and

business accounting

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Answer 1

Answer #1

Answer- Depreciation expense-Year 2010= $15536

Year 2011 =$9322

Year 2012 =$5593

Year 2013 =$3356

Year 2014=$3433

Explanation- Double Declining balance depreciation is calculated using the following formula:

Depreciation = Depreciation Rate * Book Value of Asset

Depreciation rate is given by the following formula:

Depreciation Rate = Accelerator *Straight Line Rate

Straight-line Depreciation Rate = 1/5 = 0.20 = 20%
Declining Balance Rate = 2*20% = 40%

Depreciation expense for 2010 = $38840 *40% = $15536

Book value at the end of year 2010 = $38840-$15536 =$23304

Depreciation expense for 2011 = $23304 *40% = $9322

Book value at the end of year 2011 = $23304-$9322 =$13982

Depreciation expense for 2012 = $13982 *40% = $5593

Book value at the end of year 2012 = $13982-$5593 =$8389

Depreciation expense for 2013 = $8389 *40% = $3356

Book value at the end of year 2013 = $8389-$3356 =$5033

Depreciation expense for 2014 = $5033-$1600 =$3433

Book value at the end of year 2014 = $1600

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Apr. 1: Acquired land and communication equipment in a lump-sum purchase. Total cost was $350,000 paid...

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