hannahkharel2
15.04.2020 •
Business
A pressurized spray painter was purchased on september 1 of the fiscal year for $4800 it has a useful life of 4 years and a residual value of $500 determine depreciation expense for the first two years assuming a fiscal year end of december 31 and using the straight line method and the declining balance method
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Ответ:
Using the straight-line method: $2,150
Using the declining balance method: $3,600
Explanation:
The double-declining method is otherwise known as the reducing balance method and is given by the formula below:
Double declining method = 2 X SLDP X BV
SLDP = straight-line depreciation percentage
BV = Book value
Under straight-line method, depreciation expense is (cost - residual value) / No of years = ($4,800 - $500) / 4 years = $1,075 yearly depreciation expense. Therefore, first two years would be $1,075 x 2 years = $2,150.
Under the double-declining method, 100%/4years = 25%, then 25% multiplied by 2 to give 50%
At Year 1, 50% X $4,800 = $2,400
At Year 2, 50% X $2,400 ($4,800 - $2,400) = $1,200
Therefore, first two years would be $3,600.
The depreciation expense would stop at a stage when amount falls below the residual value.
Neglect the purchase date, since the question asked for depreciation expense for first 2 years.Ответ:
public education, fire protection, police services,