I need help with an accounting assignment

Accounting
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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
Dec 9th, 2015

Thank you for the opportunity to help you with your question!

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


Please let me know if you need any clarification. I'm always happy to answer your questions.
Dec 9th, 2015

wrong answers please recheck 

Dec 9th, 2015

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