Question

Depreciation by two methods
a computer system acquired on january 1 at a cost of $35,000 has an estimated useful life of five years. assuming that it will have no residual value.
a. determine the depreciation for each of the first two years by the straight line method.
b. determine the depreciation for each of the first two years by the double-declining-balance method.

Answer 1

Years          Straight line method     Double declining-balance method

Year 1              $7,000                                   $14,000

Year 2             $7,000                                    $ 8,400

What is depreciation?

Depreciation refers to the monetary value of an assets that decreases over time due to use, wear and tear or obsolescence.

Explanation:- A). Straight line method = (cost of computer - residual                                          value) / Estimated useful life

                  = ($35,000 - 0) / 5

                  = $7,000

Note:- Depreciation amount in straight line method would remain the same for every year.

Straight line depreciation = (Depreciation/ Cost of computer) *100

                                           = (7,000/ 35,000)* 100 = 20%

B). Double-declining-balance method = 2* straight line method ( i.e. 2*20%) = 40%

Year 1 = $35,000* 40% = $14,000

Year 2 = $21,000( $35,000- 14,000) *40% = $8,400

Learn more about the depreciation here:-

https://brainly.com/question/15085226

#SPJ1