Fill in the book value at the end of year 1 under each depreciation method when...
Fill in the book value at the end of year 1 under each depreciation method when residual value is $36,000 and useful life is 4 years:
|
Depreciation method: |
|
|
Straight-line |
$335,250 |
|
Units-of-Output |
|
|
Double-declining |
$217,500 |
Homework Answers
Using Straight Line method:
Book Value= $335,250
Residual Value= $36,000
Value to be depreciated = 335,250- 36,000= 299,250
Life= 4 years
depreciation each year= 299250/4=
$74,812.5
book value at the end of year1= 335,250-74,812.5
= $260,437.5
Double declining balance method:
Book Value= $217,500
Straigth line dep percent= 100%/4= 25%
Depreciation = 2* Straigth line dep percent * Book Value
=2*0.25*217,500
= 108,750.
Book Value at the end of year 1= 217500-108750
=108,750
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