In early January 2011, LabTech purchases computer equipment for $147,000 to use
ID: 2423115 • 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
Year Beginning-year Book Value Depreciation Annual Depreciation Year-End Book Value Rate 2011 147000 50% 73500 73500 Cost of machine 147000 2012 73500 50% 36750 36750 expected life 4 2013 36750 50% 6750 30000 Annual depreciation rate 25% 2014 30000 50% No depreciation 30000 Double declining rate 50% Total 117000