Respuesta :
Answer:
a) $5,000
b) $5,500
c) $6,000
Explanation:
Given:
Cost of the truck = $22,000
Salvage value = $2,000
Useful life = 4 years or 100,000 miles
Now,
a) straight line method of depreciation
Depreciation = [tex]\frac{\textup{Cost-salvage value}}{\textup{Useful life}}[/tex]
or
Depreciation = [tex]\frac{\textup{22,000-2,000}}{\textup{4}}[/tex]
or
Depreciation = $5,000 per year
therefore,
The depreciation for the second year is $5,000
b) Double-declining balance
Depreciation = 2 × Cost of the asset × Depreciation rate
also,
Depreciation rate = [tex]\frac{\textup{1}}{\textup{Useful life}}\times100\%[/tex]
or
Depreciation rate = [tex]\frac{\textup{1}}{\textup{4}}\times100\%[/tex]
or
Depreciation rate = 25% = 0.25
Therefore,
Depreciation for the first year = 2 × $22,000 × 0.25
or
Depreciation for the first year = $11000
Thus, value of truck for the second year = Cost - Depreciation
= $22,000 - $11,000
= $11,000
Now,
Depreciation for the second year = 2 × $11,000 × 0.25
or
Depreciation for the first year = $5,500
c) units-of-production
Depreciation rate = [tex]\frac{\textup{Cost-salvage value}}{\textup{usage}}[/tex]
or
Depreciation rate = [tex]\frac{\textup{22,000-2,000}}{\textup{100,000}}[/tex]
or
Depreciation rate = 0.20
therefore ,
Depreciation for the second year = Miles driven × Depreciation rate
= 30,000 × 0.2
= $6,000
Depreciation expense in year 2 using the following methods:
(a) straight-line = $5000
(b) double-declining balance = $5,500
(c) units-of-production = $6000
Depreciation is the decline in the value of an asset with the passage of time.
Depreciation expense using the straight line depreciation method
Straight line depreciation expense : depreciable cost / useful life of the asset
Depreciable cost = Cost of the asset - salvage value
($22,000 - $2000) / 4
(20,000) / 4 = $5000
Depreciation expense using the double-declining depreciation method
Depreciation expense = (2/ useful life of the asset) x cost of the asset
Depreciation expense in year 1 = (2/4) x $22,000 = $11,000
Book value = $22,000 - $11,000 = $11,000
Depreciation expense in year 2 = (2/4) x $11,000 = $5,500
Depreciation expense using the units-of-production depreciation method
Depreciation expense = (miles driven in year 2 / total miles) x (Cost of the asset - salvage value)
(30,000 / 100,000) x ($22,000 - $2000) = $6000
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