Homework Answers
Solution:-
Salvage Value = $90000
Useful life = 8 years
Depreciation under double declining method
Depreciable Base = $1590000 – $66900 = $15,23,100
Depreciation Expense = $15,23,100 / 8 =1,90,387.5
Straight-Line Depreciation Rate= 1,90,387.5 / $15,23,100 = 0.125 or 12.5%
Double-Declining Depreciation Method = 12.5%*2 = 25%
| Year | Book value at the beginning | Depreciation | Book value at the end |
| 1 | $15,90,000 | $3,97,500 | $11,92,500 |
| 2 | $11,92,500 | $2,98,125 | $8,94,375 |
| 3 | $8,94,375 | $2,23,593.75 | $6,70,781.25 |
| 4 | $6,70,781.25 | $1,67,695.31 | $5,03,085.94 |
| 5 | $5,03,085.94 | $1,25,771.49 | $3,77,314.46 |
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