The Rander Company acquired a delivery truck for $23,747 on Jan 1. The truck has an estimated salvage value of $318 and an estimated useful life of 4 years. The company operates on a calendar year accounting period and uses double-declining-balance depreciation. What amounts of depreciation should be recorded for the first year? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
the answer is 11,874 I need to know what the answer would be for year 2
Depreciation in year 1 would be the cost of the truck x twice the straight line rate.
Year two depreciation would be the (cost of the truck - accumulated depreciation) x twice the straight-line rate. Straight line depreciation is 1/useful life, DDB is twice that rate.
Double declining balance is the only method that does not subtract the salvage value before calculating depreciation. Salvage value is still important though. The asset is not depreciated below the salvage value.