Question

A fleet of refrigerated delivery trucks is acquired on January 5, 2 and an estimated salvage value of $78,300 017,at a cost of $870.000 with an estimated usefu Ife of B years Compute the depreciation expense for the first three years using the double-declining-balance method. (Round your answers to the nearest dollar.) on for the Period End of Period Beginning of Depreciation Period Period Book Depreciation Depreciation Accumulated Expense Book Value Rate (%) First Year Second Year Third Year < Prev 21 of 34 Next commandoption

Answer 1

	Depreciation for the period			End of period
Annual period	Beginning of period book value (a)	Depreciation rate (%) (b)	Depreciation expense (a × b = c)	accumulated depreciation (d)	book value (a - c =e)
First year	$870,000	25%	$217,500	$217,500	$652,500
Second year	$652,500	25%	$163,125	$380,625 ($217,500 + $163,125)	$489,375
Third year	$489,375	25%	$122,344	$502,969 ( $380,625 + $122,344)	$367,031

Note:-

1) Depreciation rate = 100%/8 = 12.5% ×2 = 25%

In double declining balance method first divide 100% by estimate useful life of assets and than multiply it by 2.