Question

Bramble Company purchases equipment on January 1, Year 1, at a cost of $552,000. The asset is expected to have a service life of 12 years and a salvage value of $49,680. Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method

Answer 1

Calculate depreciation under double-declining balance method as follows: 2 AB Double Declining Depreciation 2 Cost 552000 3 Salvage Value 49680 4 Useful Life 6 Year 71 2 9 3 1 $ Depreciation For Year Accumulated Depreciation Book Value at End of Year 92,000 $ 92,000 $ 4,60,000 76,667 $ 1,68,667 S 3,83,333 $ 63,889 $ 2,32,556 S 3.19.444 Calculations: A B Double Declining Depreciation 2 Cost 552000 3 Salvage Value 49680 4 Useful Life 12 6 Year 7 1 8 2 9 3 Depreciation For Year Accumulated Depreciation Book Value at End of Year =B2%2/12 =B7 =B2-C7 =D7*2/12 =C7+B8 =B2-C8 D8*2/12 =C8+B9 =B2-C9 The values have been rounded off to zero decimal places. In case there is some different decimal requirement, please comment in the comment section, I would modify the answer accordingly. For any queries or doubts related to format or any values please post in comment section, I would take that up.