Computer equipment was acquired at the beginning of the year at a cost of $46,250 that has an estimated residual value of $2,800

Question

3 years ago

12

Computer equipment was acquired at the beginning of the year at a cost of $46,250 that has an estimated residual value of $2,800

and an estimated useful life of five years. (a) Determine the depreciable cost $ (b) Determine the double-declining-balance rate % (c) Determine the double-declining-balance depreciation for the first year $

Business

1 answer:

anyanavicka [17] · Answer 1 · 2022-09-06T13:07:58+03:00

Answer:

Explanation:

Double Declining balance method is the form of accelerated depreciation method, in which value of asset depreciated twice by the rate which is charged in straight line method.

Depreciable Cost = Cost of Asset - Residual value

Depreciable Cost = $46,250 - $2,800 = $43,450

Double-declining-balance rate = [ 2 x ( Cost of Asset - Residual value ) / Useful life ] / Cost of Asset

Double-declining-balance rate = [ 2 x $46250 / 5 ] / $46,250 = 40%

Double Declining balance depreciation for the first year = $46,250 x 40% = $18,500