colosains2101 colosains2101

21-05-2017
Mathematics

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a truck costing 25,000 with a residual value of 5,000 and a 10 year estimated life, what is the book value at 2 years

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Aliwohaish12 Aliwohaish12

21-05-2017

$25,000 - 5,000 = $20,000
Since the useful life is 10 years or 10% per year, double-declining rate would be 20%

Year 1
$20,000 x .2 = $4000
Book Value = $16,000

Year 2
$16,000 x .2 = $3,200
Book Value = ($16,000-3,200) = $12,800

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