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jarptica [38.1K]
3 years ago
7

The cost of an asset is $ 1,020,000​, and its residual value is $ 100,000. The estimated useful life of the asset is ten years.

Calculate depreciation for the first year using the two minus declining minus balance method of depreciation.​ (Do not round any intermediate​ calculations, and round your final answer to the nearest​ dollar.)
a. $ 204.000
b. $ 92.000
c. $ 102. 000
d. $ 184.000
Business
1 answer:
dsp733 years ago
6 0

Answer:

Option (a) $204,000

Explanation:

Data provided in the question:

Cost of the asset = $1,020,000

Residual value = $100,000

Useful life = 10 years

Now,

Using the 2-declining-balance method of depreciation

The rate of annual depreciation = 2 × [ 1 ÷ Useful life ]

= 2 × [ 1 ÷ 10 ]

= 0.20

Therefore,

Depreciation for the first year = Cost × Rate of depreciation

= $1,020,000 × 0.20

= $204,000

Hence,

Option (a) $204,000

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