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Central Supply purchased a new printer for $30,000. The printer is expected to operate for eight (8) years, after which it will be sold for salvage value (estimated to be $3,000). How much is the first and second year's depreciation expense if the company uses the double-declining-balance method

Sagot :

bharathparasad577

Central supply:

Life = 8 years. Depreciation rate = 100*2/8 = 25%

Book value at the start of year 1 = 30,000. Depreciation amount = 25% of 30,000 = 7,500

BV at the start of year 2 = 30,000-7,500 = 22,500. Depreciation amount = 25% of 22,500 = 5,625

Thus depreciation for 1st year is 7,500 and for 2nd year is 5,625

Legget & Plat:

a. % of asset being used up in 2011 is:

Depreciation in 2011/gross value of assets, excluding land, in 2011

Depreciation in 2011 = 98.1

Net value of property and plant - land = 580.6-45.2 = 535.4

This is the net value i.e gross value - depreciation for the year

Thus gross value of the assets = 535.4+98.1 (net value +depreciation for 2011)

= 633.5

Thus % of assets used up = 98.1/633.5 = 15.49%

b. If 15.49% of asset is being used up, then useful life = 100%/15.49% = 6.5 years

Thus this is the answer.

To learn more about depreciation, refer: https://brainly.com/question/25785586

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