A delivery truck was acquired on January 1, 1998. The cash price of the truck was $142,400 and...
Question:
A delivery truck was acquired on January 1, 1998. The cash price of the truck was $142,400 and $16,000 was spent preparing the truck for operation. During the first year of operations, the truck s oil was changed several times for a total cost of $1,000. The truck has an 8-year useful life and a $32,000 residual value; double-declining balance depreciation is being used.
What is reported on the income statement as depreciation expense for the year ended December 31, 2000?
What Is The Double Declining Depreciation Method:
The Double Declining Depreciation Method is one of the acceptable depreciation methods under GAAP. Because the Double Declining Depreciation Method has a higher initial depreciation, it is best used for assets that give most of their economic benefits if the first few years of its existence.
Answer and Explanation: 1
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View this answerStep 1: The cost of the asset is:
=142,400 +16,000
=$158,400
Step 2: The deprecation rate is:
=2/8
=25%
Step 3: The 2000 depreciation expense...
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Methods of Depreciation
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Chapter 6 / Lesson 1
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When completing financial reports, depreciation, or a loss in value, can be reported using three different methods: straight-line, double declining balance, and units of production. Learn to calculate depreciation using each of these methods.
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