Trencher Backhoe

Accounting problem help?

8.value: 9 points on 1 April 2008, Briceni shovel Co. buys a trencher for $ 253,000. The machine is scheduled to last five years and have a salvage value of $ 25,300. Required: Calculate depreciation expense for the year 2009 assuming that the company uses the double declining balance. (Omit. Sign "$" in your response) Depreciation and amortization for the year $ 2009 Check My WorkeBook LinkReferences Leaf Difficulty: Medium Learning Objective: 10-C3

The depreciation rate is linear 20% (100% / 5) per year, so the double-declining balance percentage will be 40% of the current book value per year. The double drop method ignores the value recovery, but the book value is not allowed to fall below the salvage value. 2008 Redemption: 253,000 x 40% x 9.12 = 75 900 2009 Redemption: The first three months: 253,000 x 40% x 3.12 = 25,300 = 253.000 New book value - from 75,900 to 25,300 = 151,800 last nine months: 151,800 x 40% x 9 / 12 = 45,540 Amortization for 2009 = 25,300 + 45,540 = $ 70,840

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