Asked by Jalah Coleman on May 29, 2024
Verified
A car is purchased for $30,000 on January 1. It has a 5-year life and a salvage value of $2,000. Compute the annual depreciation expense using the double declining-balance method for all 4 years.
Salvage Value
is the estimated residual value of an asset at the end of its useful life.
Depreciation Expense
The allocated amount of an asset's cost expensed over its useful life to account for wear and tear, obsolescence, or decline in value.
Car Purchase
The process of acquiring a vehicle for personal or business use, which may involve financing or leasing options.
- Determine expenses related to depreciation by employing the units-of-production method as well as varying methods.
Verified Answer
RP
rhonekia parkerMay 31, 2024
Final Answer :
Year 1: $12,000 ($30,000 × .4)
Year 2: $7,200 ($18,000 ×. 4)
Year 3: $4,320 ($10,800 × .4)
Year 4: $2,592 ($6,480 × .4)
Year 5: $1,888 ($3,888 - $2,000)
Year 2: $7,200 ($18,000 ×. 4)
Year 3: $4,320 ($10,800 × .4)
Year 4: $2,592 ($6,480 × .4)
Year 5: $1,888 ($3,888 - $2,000)
Learning Objectives
- Determine expenses related to depreciation by employing the units-of-production method as well as varying methods.