Homework Answers
Your answer = 5400 is absolute correct one.
Explanation
Let .......... X be the cost of asset
Under double declining method, cost of the asset is depreciated at a rate of 200 / life
= 200 / 8
= 25%
Book value of the asset at the end of 2022 = X - X * 0.25 = 0.75 * X
Depreciation for 2023 = (0.75 * X )* 25% = 30000 ( given)
0.1875 * X = 30000
X = 160000
Given that equipment book value after 4 years under straight line method = 82700
Thus deprecation for 4 years = 160000 - 82700 = 77300
Annual depreciation = 77300 / 4 = 19325
Annual depreciation under straight line method = ( cost - Salvage value ( / Life = 19326
( 160000 - Salvage ) / 8 = 19325
160000 - Salvage = 19325 * 8 = 154600
Hence ...........Salvage = 160000 - 154600 = 5400
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