Question

Question 1 (5 points) In 2019, Leo construction traded in a light duty pickup truck that had a book value of $15,000. A new pickup truck having a fair market value of $55,000 was acquired. Because the vendor accepted the old truck as a trade-in, a deal was agreed and Leo construction would pay $35,000 for the new truck. Assume the new truck has a 5-year depreciable life, and an estimated salvage value of $5,000. Using the straight-line method to tabulate the annual depreciation amounts and the book value of the pickup truck at the end of each year. Year Depreciation for Yeart Cumulative Depreciation to Yeart Book Value at the End of Yeart BV -WN-- Question 2 (5 points) Rework question I using declining balance method when R-2/N (200% declining balance method). Year Depreciation for Year Cumulative Depreciation to Yeart Book Value at the End of Yeart BV

QUESTION #2 PLEASE.

Answer 1

foc question 1 X BC E F G H I J K question 1 cash paid book value of old truck book value of new truck expected salvage value of new truck depreciable value of new truck $ 35,000 $ 15,000 $ 50,000 $ 5,000 $ 45,000 year depreciation for yeart cumulative depreciation to yeart book value at the end of yeart dt dt* $ 9,000 $ 9,000 $ 9,000 $ 9,000 $ 9,000 $ 9,000 $ 18,000 $ 27,000 $ 36,000 $ 45,000 BVt $ 41,000 $ 32,000 $ 23,000 $ 14,000 $5,000 question 2 the depreciation rate for double declining shall be 100%/5 * 2 = 40% the double declining shall be charged on the book value of the asset i.e. without deducting the salvage value depreciation for yeart cumulative depreciation to book value at the end of yeart yeart dt* dt $ 20,000 $ 12,000 $ 7,200 $ 4,320 $ 1,480 $ 20,000 $ 32,000 $ 39,200 $ 43,520 $ 45,000 BVt $ 30,000 $ 18,000 $ 10,800 $ 6,480 $ 5,000 the depreciation in the 5th year shall be limited to $1,480 so that the book value doesn't go below the salvage value of $5,000

for formulas and calculations, refer to the image below -

X fic question 1 А в с F G H I J K question 11 cash paid 35000 book value of old truck 15000 book value of new truck =SUM(E2:E3) - expected salvage value of new truck 5000 =| depreciable value of new truck =E4-E5 year depreciation for yeart cumulative depreciation to year book value at the end of yeart dt =$E$ 6/5 =$E$ 6/5 =$E$6/5 =$E$ 6/5 =S E$ 6/5 dt* =D10 = 10+D11 -E11+D12 =E12+D13 -E13+D14 BVt =$E$ 4-E10 =S ES 4-E11 =$E$4-E12 =$E$4-E13 =SES 4-E14 question 21 | the depreciation rate for double declining shall be 100%/5 * 2 = 40% the double declining shall be charged on the book value of the asset i.e. without deducting the salvage value year depreciation for yeart cumulative depreciation to year book value at the end of yeart dt dt* 1=50000*40% =F21*40% =F22*40% =F23*40% =F24-5000 3 BVt =50000-E21 =F21-D22 =F22-D23 =F23-D24 =F24-D25 =D21 =E21+D22 =E22+D23 =E23+D24 =E24+D25 4 5 the depreciation in the 5th year shall be limited to $1,480 so that the book value doesn't go below the salvage value of $5,000

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