Brief Exercise 9-13 Partially correct answer. Your answer is partially correct.

Question

Brief Exercise 9-13 Partially correct answer. Your answer is partially correct. Try again. Gordon Chemicals Company acquires a delivery truck at a cost of $40,500 on January 1, 2017. The truck is expected to have a salvage value of $4,000 at the end of its 5-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method. First Year Second Year Annual depreciation under declining-balance method

Explanation / Answer

Depreciation rate as per straight line method=(100/5)=20%/year

Hence deprecaition as per double decline balance=2*Depreciation rate as per straight line method*Beginning value of each period

Year Beginning value Depreciation Ending value 1 40500 (2*20%*40500)=$16200 (40500-16200)=24300 2 24300 (2*20%*24300)=$9720

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