1. Muddy Meadows Earthmoving can purchase a bulldozer for $8,000. After 7 years

Question

1. Muddy Meadows Earthmoving can purchase a bulldozer for $8,000. After 7 years of use, the bulldozer should have a salvage value of $1,500. What depreciation is allowed for this asset in

5 years for?

Straight Line Depreciation

Sum of the Years Digits (SOYD) Depreciation

150% Declining Balance Depreciation?

2. A used drill press cost $55,000 and delivery and installation charges add $5,000. The salvage value after 8 years is $15,000. Compute the accumulated depreciation through year 4 using:

Straight Line Depreciation

(SOYD)

DDB

Explanation / Answer

Bulldozer Cost 8000 Usefull life 7 Years Salvage Value 1500 SLM Rate 14.28571429 SYD Rate(5 Year) 0.107142857 150% Declining 14.286* 150% 21.429 SLM 928.57 (8000-1500)/7 SYD              696.43 (3/(1+2+3+4+5+6+7))*6500 5 year 150% Declining Book Value depreciation Net after Depreciation 1                                      8,000.00          1,714.40                               6,285.60 2                                      6,285.60          1,347.00                               4,938.60 3                                      4,938.60          1,058.34                               3,880.25 4                                      3,880.25              831.54                               3,048.72 5                                      3,048.72              653.34                               2,395.38 6                                      2,395.38              513.33                               1,882.05 7                                      1,882.05              403.32                               1,478.72 150% Declining              653.34

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