Answer:
a.
First Year
5% of $90,000 = $4,500
or
$90,000 ÷ 20 = $4,500
Second Year
5% of $90,000 = $4,500
or
$90,000 ÷ 20 = $4,500
b. 10% of $90,000 = $9,000 10% of ($90,000 – $9,000) = $8,100
EX 10-12 Depreciation by two methods
A Kubota tractor acquired on January 6 at a cost of $90,000 has an estimated useful life of 20 years. Assuming that it will have no residual value, determine the depreciation for each of the first two years (a) by the straight-line method and (b) by the doubledeclining-balance method.
Answer:
a.
First Year
5% of $90,000 = $4,500
or
$90,000 ÷ 20 = $4,500
Second Year
5% of $90,000 = $4,500
or
$90,000 ÷ 20 = $4,500
b. 10% of $90,000 = $9,000 10% of ($90,000 – $9,000) = $8,100
Answer:
a.
First Year
5% of $90,000 = $4,500
or
$90,000 ÷ 20 = $4,500
Second Year
5% of $90,000 = $4,500
or
$90,000 ÷ 20 = $4,500
b. 10% of $90,000 = $9,000 10% of ($90,000 – $9,000) = $8,100