Question

1. A company entered into the following transactions concerning its computer system: On January 1, 2010 purchased a computer system that cost $280,000. The estimated useful life of the computer is 3 years and salvage value is $40,000. Calculate the first years depreciation using (1) St. Line and (2) Double Declining Balance.

Answer 1

Answer:

First year Straight line = (280000-40000/3) =80000

Double decline = 100/3*2 = 2/3 = 280000*2/3 = $186667