2. Depreciation under sum of digits method
= n*(n+1)/2 where n is useful life
= 4*(4+1)/2 = 10
Depreciation for first year = (40,000-10,000)*4/10 = 12,000
Double declining rate = 200/Useful life = 200/4 = 50%
Depreciation for first year = 40,000 * 50% = 20,000
Option B (Lower)
.
Depreciation for year = (Cost - Salvage value) /Useful life
= (22,000-2200)/4 = 4950 per year
Book value on Jan 1,2012 = 22,000 - 4950 = 17,050
Option C
QUESTION 2 A machine with a four-year estimated useful life and an estimated residual value of...
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