please help me with this financial accounting question?

D

dreamer

New member
Conlin Company acquires a delivery truck at a cost of $55,110. The truck is expected to have a salvage value of $6,670 at the end of its 5-year useful life.
Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method. (Round your answers to 0 decimal places.)


Year 1: $?
Year 2: $?
 
5-year useful life means a straight-line rate of 20% So a double declining-balance depreciation rate means 40%.

Cost $55,110
Yr 1 depreciation ($22,044)
Net book value $33,066
Yr 2 depreciation ($13,226.40)

Answer:
Year 1: $22,044
Year 2: $13,226

Note an important general rule for DDB -- salvage value is initially ignored, but once accumulated depreciation reaches the amount of the depreciable base, then depreciation ceases.
 
here is the formula
Depreciation= cost-salvage value / number of year
so it will be 55110-6670 / 5 = 9688
so at the end of the first year, the value of the truck will be 45422
and at the end of the second year, it will be 35734

I dont usuallly answer school related questions around this time, for some reasons, i answered this. Lucky u.
 
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