Question

Accounting Question: Compute annual depreciation for the first and second years under the declining-balance method...

Answer 1

Weller Company acquires a delivery truck at a cost of $69,300. The truck is expected to have a salvage value of $2,300 at the end of its 5-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate.

Compute annual depreciation for the first and second years under the declining-balance method.

Answer 2

I cannot seem to get this question right, any help would be MUCH appreciated!

Answer 3

@johnweldon1993 are you as good at accounting as you are math? :P

Answer 4

Well from what I remember from accounting

Your straight-line rate would be 1/5 = 20% since it has a 5 year useful life

so double that is 40%

so lets find out the depreciation after 1 year

\[\large 69300 \times .40 = ?\]

Answer 5

Still there @suwhitney ?

Answer 6

So sorry @johnweldon1993! I got pulled away for a second.. 69300x.40=27720 :) And thats for year 1? Correct?

Answer 7

omg i figured the rest out! :)

Answer 8

No problem :) and yes...that is the annual depreciation for year 1

Now we need the book value after year 1 which is just the original - the depreciation...

69300 - 27720 = ?

From that answer, we can then figure out the depreciation after year 2 by multiplying that answer by .40

Answer 9

16632!

Answer 10

Yayyy!! Thank you so much! You're a genius :P

Answer 11

Oh nvm :D haha awesome ^_^ :P