Question

Question 4 1 pts A piece of equipment has an installed value of $200,000 with an estimated trade-in value of $50,000 after 15 years. Using DDB book depreciation determine the depreciation charge at year 12. Between $4,000-$6.000 0 Between $2.000-$4.000 Greater than $6,000 O Less than $2.000 D | Question 5 1 pts A company company can depreciate a piece of equipment using MACRS (5-year class) method. The book value of the car at the end of year one is $1,157.085. Determine the book value of it at the end of year 3 Less than $400.000 Between $400 000 5500.000 Between $500,000-5600.000 Greater than $600.000 Question 6 1 pts

need help on both of these. thank you for your help

Answer 1

Annual Depreciation rate r: 100/15 %

For DDB: the value after n years: (n<15): We take twice the level of depreciation: so, depreciating value: 2*r

Value of asset: (200,000-50,000)(1- 2*r/100)^n

=150,000( 1- 2*100/15*100)^n

= 150,000(13/15)^n

at the end of 11th year:

Value of Asset: 150,000(13/15)^11 = 31,078.80

So, Depreciation charge at 12th year: 31078.80* 2*100/15*100

= 31078.80*2/15 = 4143.84

Answer: A