question "Consider the following data on an asset Cost of the asset, I = $87,000 Useful...
question
"Consider the following data on an asset
Cost of the asset, I = $87,000
Useful life, N = 7 years
What is the book value at the end of the useful life if you
depreciate according to the double-declining-balance (DDB)
method?"
Homework Answers
Straight line depreciation rate= 1/7= 14.28%
Double declining balance method depreciation rate= 2*14.28= 28.6%
| Year | Book value at the beginning of year | Depreciation rate | Depreciation expense | Book value at the end of year |
| 1 | $87,000 | 28.6% | $24,882 | $62,118 |
| 2 | $62,118 | 28.6% | $17,765.75 | $44,352.25 |
| 3 | $44,352.25 | 28.6% | $12,684.74 | $31,667.51 |
| 4 | $31,667.51 | 28.6% | $9,056.91 | $22,610.6 |
| 5 | $22,610.6 | 28.6% | $6,466.63 | $16,143.97 |
| 6 | $16,143.97 | 28.6% | $4,617.18 | $11,526.79 |
| 7 | $11,526.79 | $11,526.79 | $0 |
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