The cost of an asset is $10,000,000, and its residual value is $100,000. Estimated useful life of the asset is four years. Prepare the schedule of depreciation using the double-declining-balance method of accounting
What will be an ideal response
Depreciation for the year
DDB Depreciation Accumulated Book
Year Asset cost Book value Rate expense depreciation value
0 $10,000,000 $10,000,000
1 $10,000,000 2 x 1/4 $5,000,000 $5,000,000 5,000,000
2 $5,000,000 2 x 1/4 2,500,000 7,500,000 2,500,000
3 $2,500,000 2 x 1/4 1,250,000 8,750,000 1,250,000
4 1,250,000 1,150,000* 9,900,000 100,000
*(1,250,000 - $100,000 )
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