A fleet of refrigerated deliverytrucks is acquired on January 5, 2008, at a cost

Question

A fleet of refrigerated deliverytrucks is acquired on January 5, 2008, at a cost of $830,000 withan estimated useful life of eight years and an estimated salvagevalue of $75,000. Compute the depreciation expense for the firstthree years using the double-declining-balance method.(Round your answer to the nearest dollar amount. Omit the"$" sign in your response.)

Depreciation for the First year

$

Depreciation for the Second year

$

Depreciation for the Third year

$

Depreciation for the First year

$

Depreciation for the Second year

$

Depreciation for the Third year

$

Explanation / Answer

year

Depreciation

Accumulated

Calculation

Expense

Depreciation

1

$207,500

$207,500

(830000 * 25% )

2

$155,625

$363,125

{($830000-$207500) *25%}

3

$116,720

$479,845

{($830000 -$363125) *25%}

Cost           = $8,30,000 Salvage value = $75,000 life               = 8years Depreciation rate = 2/8 or 1/4 (25%) {twice thestraight line 1/8 *2}

year

Depreciation

Accumulated

Calculation

Expense

Depreciation

1

$207,500

$207,500

(830000 * 25% )

2

$155,625

$363,125

{($830000-$207500) *25%}

3

$116,720

$479,845

{($830000 -$363125) *25%}

Note: According to the Fractional-yearpolicy it is assumed to calculate          Depreciationexpense on the basis of the nearest full month.

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