Question

You purchased a building, equipment and a truck for $700,000 cash. The building has an
appraisal value of $400,000, the equipment $300,000 and a truck appraised at $100,000
Determine the cost to be assigned to each asset and prepare the journal entry to make
the purchase. (I only need help with the table below, I attached the info above in case you need it) The equipment has a salvage value of $10,000, life expectancy of 5 years. Calculate depeciation for all years necessary using the double declining balace. What is the book value at the beginning of year 6? Depreciation Book-Value Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Answer 1

Cost of equipment = $300000 x 7/8 = $262500
DDB Rate = 1/5 x100 x 2 = 40%

Year	Beg Book Value	Depreciation	Acc Dep	End Book Value
1	$        2,62,500	$        1,05,000	$          1,05,000	$        1,57,500
2	$        1,57,500	$           63,000	$          1,68,000	$           94,500
3	$           94,500	$           37,800	$          2,05,800	$           56,700
4	$           56,700	$           22,680	$          2,28,480	$           34,020
5	$           34,020	$           13,608	$          2,42,088	$           20,412
6	$           20,412