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14 March, 06:33

halcrow yolles purchased equipment for new highway construction in manitoba canada costing 550000. estimated salvage value at the end of the expected life of 5 years is 50000. various accectable deprecition methods are being studied currently. determine the book value for year 2 according to the DDb method

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  1. 14 March, 09:38
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    150,000

    Explanation:

    Cost of equipment = 550,000

    Estimated salvage value = 50,000

    Useful life = 5 Years

    Straight line method yearly depreciation charge = (550000 - 50000) / 5

    = 500000/5

    = 100000

    Using the DDb method, Yearly depreciation = 2 * 100000

    = 200000

    Book value for year 1 = 550000 - 200000

    = 350000

    Book value for year 2 = 350000 - 200000

    = 150000

    Book value for year 2 = 150,000
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