Question

PRIN. OF ACCT 1811 (ACCT 2101 2102) tice Assignment Gradebook ORION Downloadable eTextbook ment CALCLAIOR FULL SCREEN PRINTER VERSION BACK NEXT Brief Exercise 9-13 Oriole Chemicals Company acquires a delivery truck at a cost of $40,500 on January 1, 2022. The truck is expected to have a salvage value of $3,100 at the end of its 5-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual deprediation for the first and second years under the declining-balance method. First Year Second Year Annual depreciation under declining-balance method Open Show Work Click if you would like to Show Work for this question:

Answer 1

	CALCULATION OF THE DEPRECIATION AS PER DOUBLE DECLINE METHOD OF TRUCK
	Purchase Cost of Machine	$                40,500.00
	Useful Life =	5 years
	Depreciation per year =	$                  8,100.00
	(Purchase price / Useful life)
	Rate of Depreciation =
	Rate of Depreciation = Straight line method=	0.20 or 20%
	(Depreication / Purchase price ) ($ 8,100 / $ 40.500)
	Double decline deprection rate = 20 % * 2 =	40.00%
	Depreciation for the First Year
	Purchase Value =	$                      40,500
	Depreciation @ 40% for the year 1	$                      16,200
	Closing value at year end 1	$                      24,300
	Depreciation for the Second Year
	Opening balance of Year 2	$                      24,300
	Depreciation @ 40% for the year 2	$                        9,720
	Closing value at year end	$                      14,580
	Answers:	First Year	Second Year
	Depreciation Expenses	$                      16,200	$             9,720