A fleet of refrigerated delivery trucks is acquired on January 5, 2009, at a cos

Question

A fleet of refrigerated delivery trucks is acquired on January 5, 2009, at a cost of $1,200,000 with an estimated useful life of eight years and an estimated salvage value of $100,000. Compute the depreciation expense for the first three years using the double-declining-balance method.


*Please explain how you get your answer and make sure that it is 100% correct.


Thank you

Explanation / Answer

Useful life = 8 years --> Straight line depreciation rate = 1/8= 12.5% per year Depreciation rate for double declining balance method = 12.5% x 100% = 12.5% x 1 = 11.2% per year Depreciation for 2009 = $1,200,00 x 12.5% x 9/12 = $31,500 Depreciation for 2010 = ($120,000 - $100000) x 12.5% x 12/12 = $25,0000 Depreciation for 2011 = ($120,000 - $31500 ) x 12.5% x 12/12 = $1106250

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.