Answer:
$8,528
Explanation:
A
The double-declining method uses twice the rate of the straight-line depreciation method.
For Talia's tutu, the straight-line method will be 1/5 x 100
=0.2 x 100
=20%
The double-declining method will use 40%
The depreciation schedule for three years will be as follows for 5 years is as follow
<u>Opening balance Depreciation amount new Book value</u>
$55,000 $22,000 $33,000
$33,000 $13,200 $19,800
$19,800 $7,920 $11, 880
$11,880 $4,752 $ 7,128
$7,128 $,2,851.2 $,4,276.8
B.
If the asset is sold after three years.
The Book value after 3 years = $11,880
The machine is sold for $25,000
the gross profits from the machine
= $25,000 - $11,880
=$13,120
the tax rate =35%
=35/100 x $13,120
=0.35 x $13,120
=$4,592
net realized = $13,120 - $4,592
= $8,528
