Double-Declining-Balance Depreciation A building acquired at the beginning of the year at a cost of $74,000 has an estimated residual value of $3,700 and an estimated useful life of four years. Determine the following. (a) The double-declining-balance rate (b) The double-declining-balance depreciation for the first year
Double-Declining-Balance Depreciation A building acquired at the beginning of the year at a cost of $74,000 has an estimated residual value of $3,700 and an estimated useful life of four years. Determine the following. (a) The double-declining-balance rate (b) The double-declining-balance depreciation for the first year
Chapter1: Financial Statements And Business Decisions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Double-Declining-Balance Depreciation
A building acquired at the beginning of the year at a cost of
$74,000 has an estimated residual value of $3,700 and an
estimated useful life of four years. Determine the following.
(a) The double-declining-balance
rate
(b) The double-declining-balance
depreciation for the first year
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