In early January 2011, LabTech purchases computer equipment for $147,000 to use
ID: 2420514 • Letter: I
Question
In early January 2011, LabTech purchases computer equipment for $147,000 to use in operating activities for the next four years. It estimates the equipment’s salvage value at $30,000.
Prepare a table showing depreciation and book value for each of the four years assuming double-declining-balance depreciation. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" and "%" signs in your response.)
In early January 2011, LabTech purchases computer equipment for $147,000 to use in operating activities for the next four years. It estimates the equipment’s salvage value at $30,000.
Explanation / Answer
Computer equipment cost = $147,000
Equipment’s salvage value = $30,000.
Life = 4 years
Double declining depreciation = 2*(asset cost- salvage value)/life
Year
Depreciation
Book value (at end)
1
58500
88500
2
29250
59250
3
14625
44625
4
7312.5
37312.5
Year
Depreciation
Book value (at end)
1
58500
88500
2
29250
59250
3
14625
44625
4
7312.5
37312.5