Question

Double-Dedining-Balance Deprediation A small delivery truck was purchased on January 1 at a cost of $25,300. It has an estimated useful Iife of four years and an estimated salvage value of $5,050 prepare a depreciation schedule showing the depreclation expense, accumulated deprediatien, and book value for each year under the double-dedining-balance method. If an amount box does nst require an entry, leave it blank. Small Delivery Truck Depreciation Schedule On January Book Valkue Accumulated Depreciation End of Yea, Book Value Year Beginning of Year x Rate (%)- Depreciation Expense e End ef Year 12.650 6325 125.300 2 (12.650 6325 3,162 22.137 43163

Answer 1

Step 1
Double Declining balance depreciation method
Small Delivery Truck depreciation schedule
Year	BookValue begining of the year	Rate %	Deprecation Expense	Accumilated deprecation	Book Value end of the year
1	$25,300	50%	$12,650	$12,650	$12,650
2	$12,650	50%	$6,325	$18,975	$6,325
3	$6,325	50%	$3,163	$22,138	$3,163
4	$3,163	50%	$1,581	$23,719	$1,581
Under Double declining balance depreciation method depreciation is calculated by using the following formula
2*(1/Estimated Useful life )*Book value at the beginning of the year = Depreciation Expense
Step 2
Sum of the year digits depreciation method
Small Delivery Truck depreciation schedule
Year	Depreciable cost	Rate %	Deprecation Expense	Accumilated deprecation	Book Value end of the year
1	$23,000	40	$9,200	$9,200	$13,800
2	$23,000	30	$6,900	$16,100	$6,900
3	$23,000	20	$4,600	$20,700	$2,300
4	$23,000	10	$2,300	$23,000	$0
			$23,000
Note 1	Calculation of the sum of digits in an Assets useful life
	Asset having 4 years useful life, the sum of digits calculted as follows
	Sum of years digits                    =4+3+2+1       =10
Note 2	Deprecable Amount
	Cost of the Asset		$27,400
	Less : Estimated useful life		$4,400
			$23,000
Note 3	Calculation of % Of Depreciation under sum of the years depreciation method
Year	Remaining Estimated useful life at the beginning of the year	SYD	Applicable %
1	4	4/10	40%
2	3	3/10	30%
3	2	2/10	20%
4	1	1/10	10%
	10