Answer:
(a) $130,000
Explanation:
Given that,
Previous year book value = $1,900,000
Depreciable life = 10 years
Salvage value = $600,000
(a) Annual depreciation charge:
= (Book value - Salvage value) ÷ Depreciable life
= (1,900,000 - 600,000) ÷ 10
= $130,000
(b) Annual book value:
= Previous year book value - Current year depreciation amount
For year 0,
Annual book value = $1,900,000
For year 1,
Annual book value:
= Previous year book value - Current year depreciation amount
= $1,900,000 - $130,000
= $1,770,000
For year 2,
Annual book value:
= Previous year book value - Current year depreciation amount
= $1,770,000 - $130,000
= $1,640,000
For year 3,
Annual book value:
= Previous year book value - Current year depreciation amount
= $1,640,000 - $130,000
= $1,510,000
For year 4,
Annual book value:
= Previous year book value - Current year depreciation amount
= $1,510,000 - $130,000
= $1,380,000
For year 5,
Annual book value:
= Previous year book value - Current year depreciation amount
= $1,380,000 - $130,000
= $1,250,000
For year 6,
Annual book value:
= Previous year book value - Current year depreciation amount
= $1,250,000 - $130,000
= $1,120,000
For year 7,
Annual book value:
= Previous year book value - Current year depreciation amount
= $1,120,000 - $130,000
= $990,000
For year 8,
Annual book value:
= Previous year book value - Current year depreciation amount
= $990,000 - $130,000
= $860,000
For year 9,
Annual book value:
= Previous year book value - Current year depreciation amount
= $860,000 - $130,000
= $730,000
For year 10,
Annual book value:
= Previous year book value - Current year depreciation amount
= $730,000 - $130,000
= $600,000
