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BE9.6 (L02) Depreciation information for Corales Company is given in BE9.4. Assuming the declining- balance depreciation rate


BE9.4 (LO 2) Corales Company acquires a delivery truck at a cost of $38,000. The truck is expected to have a salvage value of
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Answer #1

Depreciation on Straight line basis = Total Cost- Salavage Value/ Useful years

= $38000-$6000/4= $8000

First Year Depreciation = $8000

Second Year Depreciation = $8000

Double Declining Depreciation rate = Depreciation/ Total Cost-salavge value*100*2 = $8000/$32000*2 = 50%

First Year Depreciation = $38000*50% =$19000

Second Year Depreciation = ($38000-$19000)*50%= $9500

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