Answer:
Explanation:
1. Calculate Straight-line depreciation
= Cost - salvage value/useful life
= $52,000 - $7,000/5
= $45,000/5
= $9,000 per year for 5 years
2. Double-declining-balance depreciation.
= 2 X Cost of the asset/Useful Life
= 2 x $52,000/5
= $104,000/5
= $20,800 year 1
= 2 X Cost of the asset/Useful Life
= 2 x (52,000-20,800)/4
= 2 x 31,200/4
=$62,400/4
= $15,600 year 2
= 2 X Cost of the asset/Useful Life
= 2 x (52,000-20,800-15,600)/3
= 2 x 15,600/3
= $31,200/3
= $10,400 year 3
= 2 X Cost of the asset/Useful Life
= 2 x (52,000-20,800-15,600- 10,400)/2
= 2 x 5,200/2
Since the cost bal is less than the salvage value, we have to stop here.
