Cost of the asset= $774,000
Useful life = 20 years
Salvage value= $68,400
Depreciation rate { 1÷useful life} ×100= 5%
Double decling balance formula= 2× cost of the asset× depreciation rate
Here it will be 2×5%=10%
Depreciation for 2020=( $774,000×10%)×9÷12
= $58,050
Depreciation is calculated for 9 months only as it is purchased on April 1, and accounting period is calander year.
Depreciation for 2021= $774,000-$58,050 = $715,950×10%= $71,595.
____×____
All the best
0.5/ Question 2 View Policies Show Attempt History Current Attempt in Progress Kingbird Company purchased a...
Question 2 View Policies Current Attempt in Progress Kingbird Company purchased a new plant asset on April 1, 2020, at a cost of $774,000. It was estimated to have a service life of 20 years and a salvage value of $68,400. Kingbird' accounting period is the calendar year. Compute the depreciation for this asset for 2020 and 2021 using the sum-of-the-years-digits method. (Round answers to O decimal places, e.g. 45,892.) Depreciation for 2020 $ Depreciation for 2021 $
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