Answer:
At the end of the 2 year, the book value of the truck is $12,600
Step-by-step explanation:
we know that
Double declining balance method is a form of an accelerated depreciation method in which the asset value is depreciated at twice the rate it is done in the straight-line method.
Step 1
Determine the straight-line depreciation rate
Divide the total cost by the number of years in the asset's useful life.
[tex]\frac{\$35,000}{5}=\$7,000[/tex]
Step 2
Then, multiply that number by 2 and that is your Double-Declining Depreciation Rate
[tex]7,000(2)=\$14,000[/tex] -----> is the depreciation for Year 1
Step 3
At the end of the first year, the book value of the truck is
[tex]\$35,000-\$14,000=\$21,000[/tex]
Step 4
For Year 2, we will apply the same formula to the book value of the truck by the end of Year 1
[tex]\frac{\$21,000}{5}=\$4,200[/tex]
[tex]4,200(2)=\$8,400[/tex] -----> is the depreciation for Year 2
therefore
At the end of the 2 year, the book value of the truck is
[tex]\$21,000-\$8,400=\$12,600[/tex]
