# I need help with an accounting assignment

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account_balance_wallet \$5

### Question Description

Howe Chemicals Company acquires a delivery truck at a cost of \$33,900 on January 1, 2014. The truck is expected to have a salvage value of \$3,700 at the end of its 4-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.

 First Year Second Year Annual depreciation under declining-balance method

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School: University of Virginia

The value to be depreciated is 33900-3700 =30200

Using the straight line method, the yearly depreciation is 30200/4 = \$7550 per year

Yearly rate using straight line method is (7550/30200)*100 = 25%

We are given that reducing balance rate is double the straight line rate.

Therefore, the reducing balance rate is 25%*2 = 50%

Reducing balance depreciation(annual)

First year = (50/100)*30200 = \$15100

Second year = (50/100)*(30200-15100) = \$7550

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Anonymous
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