Question

The cost of an asset is $ 1 comma 050 comma 000​, and its residual value is $ 210 comma 000. Estimated useful life of the asset is four years. Calculate depreciation for the first year using the doubleminusdecliningminusbalance method of depreciation.​

Answer 1

Annual depreciation= $420,000

Step-by-step explanation:

Giving the following information:

The cost of an asset is $1,050,000​, and its residual value is $210,000.

The estimated useful life of the asset is four years.

To calculate the depreciation expense using the double-declining balance, we need to use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Annual depreciation= 2*[(1,050,000 - 210,000)/4]

Annual depreciation= $420,000