From the following facts, prepare a depreciation schedule using the declining-balance method (twice the straight-line rate): (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required.) Volvo truck $ 25,000 Residual value $ 5,000 Estimated life 5 years
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Ответ:
Depreciation Schedule:
See attachment.
Explanation:
Cost of Truck = $25,000
Residual value = $5,000
Estimated life = 5 years
Method of depreciation = declining-balance method
Depreciable amount = $20,000 ($25,000 - $5,000)
Depreciation rate = 100/5 * 2 = 40%
1st year-end depreciation expense = $10,000 (40% of $25,000)
2nd year-end depreciation expense = $6,000 (40% of $15,000)
3rd year-end depreciation expense = $3,600 (40% of $9,000)
4th year-end depreciation expense = $400
Depreciation cannot exceed $400 for the 4th year because of the residual value of $5,000. With declining method, the residual value is considered at the end of the useful life and not at the beginning.
Declining balance
Beginning of Year 1 Cost = $25,000
Beginning of Year 2 Balance = $15,000 ($25,000 - $10,000)
Beginning of Year 3 Balance = $9,000 ($15,000 - $6,000)
Beginning of Year 4 Balance = $5,400 ($9,000 - $3,600)
Beginning of Year 5 Balance = $5,000
Ответ:
Bill can either make 8 toys or fix a car, in the same 4 hours. If he chooses to fix a car, that's 8 toys he could've made that he didnt (definition of opportunity cost)