Question

A building acquired at the beginning of the year at a cost of $93,600 has an estimated residual value of $6,600 and an estimated useful life of four years. Determine the following. (a) The double-declining-balance rate % (b) The double-declining-balance depreciation for the first year

Answer 1

solution: a Double- X100 2 x Useful life Asset x double -daling balance rate declining- b) The double-declining for the first year Depreciation ? Cost 양 balance rate 2 $.93,600 X 50% 2x + x100 4 501 -balance depreciation $ 46, 800 Note: The double delining balance calulation does not consider the salvage value in the depreciation of each period however, if the book value will fall below the salvage value, the last period might it ends at the salvage value. be adjusted so that final Answer: 2). The double-declining balance rale: sol- b) The DDB depreciation for the year $46,800

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