A piece of equipment is purchased on 1/1/2009 and booked for $8,000 with a salvage value...
| A piece of equipment is purchased on 1/1/2009 and booked for $8,000 with a | |||
| salvage value of $500 and a useful life of 7 years. For the first 2 years | |||
| double declining balance was used. Starting in year 3, the method | |||
| was switched to the straight-line method with the useful life extended to 9 years. | |||
| What will be the amount of depreciation recorded in 2011? | |||
Homework Answers
Double decline rate = 100/7*2 = 28.57%
First year dep = 8000*28.57% = 2286
Second year dep = (8000-2286)*28.57% = 1632
2011 Depreciation = (8000-2286-1632-500)/7 = 512
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