Homework Answers
Answer-Accumulated depreciation= $1734000.
Book value = $39066000.
Explanation- Straight line Method-Depreciation Expense Annual
= Cost of asset- Salvage value of asset/No. of useful life (years)
=($40800000-$6120000)/20 years
=$20400/20 years
= $1734000
Annual depreciation= $1734000.
Book value at 31 December 2022 = $40800000-$1734000
= $39066000
Answer Accumulated Depreciation expenses =$4080000.
Book value = $36720000.
Depreciation expenses in the second year using double decline balance method= $9600.
Explanation- Double Declining balance depreciation is calculated using the following formula:
|
Depreciation = Depreciation Rate * Book Value of Asset |
Depreciation rate is given by the following formula:
|
Depreciation Rate = Accelerator *Straight Line Rate |
Straight-line Depreciation Rate = 1/20 = 0.05 = 5%
Declining Balance Rate = 2*5% = 10%
Depreciation expenses 31 December 2020 = $40800000 *10% = $4080000
Book value at 31 December 2022 = $40800000-$4080000
= $36720000
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