Question

What is the annual depreciation amount for the storage tank in the first fiscal year using both the straight-line and double-declining balance methods?

a) $14,520 and $24,120
b) $14,400 and $24,000
c) $14,000 and $23,500
d) $15,000 and $25,000

Answer 1

The question requires the calculation of depreciation using the straight-line and double-declining balance methods, which cannot be completed without the asset's cost, salvage value, and useful life. These methods involve evenly spreading cost or accelerating depreciation over the asset's useful life, respectively.

Step-by-step explanation:

The student's question is asking for the calculation of the annual depreciation of a storage tank using both the straight-line and double-declining balance methods. Without specific information on the cost, salvage value, and useful life of the storage tank, we cannot provide the exact values they are looking for. However, we can explain the concept of each method.The straight-line depreciation method spreads the cost evenly over the useful life of an asset. The formula is (Cost - Salvage Value) / Useful Life. The double-declining balance method is an accelerated depreciation method that doubles the depreciation rate of the straight-line method. The formula is 2 x (Cost - Accumulated Depreciation) / Useful Life.Given the answer choices, it appears the student has prior knowledge of the cost and other factors for their specific question. If they provide the cost, salvage value, and useful life, a precise calculation can be made for both depreciation methods. It is also possible that the figures provided with the question, such as the $51.3 million, might be relevant, but without further context, they cannot be utilized for a correct response.