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nataly862011 [7]
3 years ago
5

On January 1, 20X1 NCAA Company purchased a truck that cost $24,000. The truck had an expected useful life of 5 years and a $4,0

00 salvage value. The amount of depreciation expense recognized in 20X3 assuming that NCAA uses the double declining balance method is:
Business
1 answer:
Lina20 [59]3 years ago
3 0
Given:
Cost = 24,000
life = 5 years
salvage value = 4,000

Double declining balance stops when the book value of the asset is equal to its salvage value.

Double declining balance formula: 2 * straight line dep. rate * book value beginning of the year.

straight line dep rate = (24,000 - 4,000) ÷ 5 yrs = 4,000
⇒ 4,000 / 20,000 = 0.2 or 20%

<span> <span> </span><span><span> year    Net book value, beg DDB dep. ext      net book value, end
</span><span>2011   24,000                      9,600                   14,400
</span><span>2012   14,400                      5,760                    8,640
</span><span>2013     8,640                      3,456                    5,184

The depreciation expense recognized in 20x3 is 3,456. </span></span></span>
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