Homework Answers
Solution :-
In the case of 150% declining balance method, depreciation is calculated as follows -
Depreciation expense = Net book value of the asset * ( 2.00 / Estimated service life )
(A) Depreciation in Year 11 = $520.86
(B) Book Value at the end of Year 10 = $4,958.42
(C) Book value at the end of the year 10 = $2,864.72
Sale price of asset = $1,800
Sale price is less than the book value of the asset. So, the firm will incur a loss on sale of this asset.
Loss = Book value at the end of the year 10 - Sale price of the asset
Loss = $2,864.72 - $1,800 = $1,064.72
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