If an asset book-depreciates by the DDB method over a 10-year period, how long will it take to reach its salvage value if the estimated salvage is 20% of the first cost? Remember, assets can continue to depreciate after they have reached their salvage value.

If an asset book-depreciates by the DDB method over a 10-year period, how long will it take to reach its salvage value if the estimated salvage is 20% of the first cost? Remember, assets can continue to depreciate after they have reached their salvage value.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A)What is the book value at the end of year eight? A)The book value at the end of year eight is…

A: 200% declining balance or double declining balance is a method of depreciation under which…

Q: ZYK company makes its policy that for every new equipment purchased, the annual depreciation should…

A: SYD Stands for Sum-of-Years Digits. The sum-of-the-years' digits (SYD) method is a faster way to…

Q: NewTech purchases computer equlpment for $273,000 to use in operating activities for the next four…

A: Annual depreciation under SLM = Cost- salvage / useful life Cost - salvage = 273000-26000…

Q: A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of…

A: Given: Cost of asset = $35,000 Life = 7 years

Q: The straight-line depreciation method and the double-declining-balance depreciation method: Group of…

A: Introduction: - Depreciation is a non-cash expense. Depreciation is charged on fixed asset over a…

Q: Your plant manager wants you to buy a new lathe for $410000. The lathe should be useful to your…

A: Depreciation is considered a reduction in the value of assets give two uses of that asset. We can…

Q: e value of an asset after 8 years

A: Annual depreciation = (Original value - Salvage value)/Useful life Original value Php 120,000.00…

Q: What is the sunk cost if the depreciation method is a straight-line method?

A: Sunk cost costs are those costs or expenses that already been spent and cannot be recovered.…

Q: If a computer is bought by a company for $100 and is depreciated using the 3-year GDS recovery…

A: Depreciation: Depreciation is the concept applied on reporting of fall in original value of fixed…

Q: 2. Answer both A and B questions. A. Briefly explain the reason why a capital asset should be…

A: The assets which are used for more than one year in order to generate the revenue by using the…

Q: At the end of the expected useful life of a depreciable asset with an estimated 15% salvage value,…

A: Depreciation is the expense which is charged on the non-current assets to charge regular usage on…

Q: An automated assembly robot that cost $378,000 has a depreciable life of 5 years with a $80,000…

A: DEPRECIATION EXPENSES Depreciation means gradual decrease in the value of an asset due to normal…

Q: When considering depreciation, is the number of years an asset should be depreciated usually just a…

A: Depreciation: The cost of the asset which is spread over the benefits of the estimated usefullife of…

Q: A machine has an initial cost of P74,777.226 and a salvage value of P8,991.127 after 7 years. What…

A: Initial cost = P 74,777.226 Salvage value = P 8991.127 Life = 7 Years Annual depreciation = (Initial…

Q: ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost…

A: Depreciation means the amount fixed assets written off due to normal wear and tear , normal usage ,…

Q: A machine has a cost basis of 1000000 TL and a salvage value of 80000 TL. Depreciation period is 8…

A: Depreciation Expense is reduction in the value of assets due to its use, wear or tear.Salvage value…

Q: What is the value of an asset after 8 years of use if it depreciates from its original value of P…

A: Working note: Computation of annual depreciation as per straight line method: Annual…

Q: When it comes to the depreciation of plant assets we calculate the amount based on the expected…

A: Depreciation can be defined as the depletion in the value of asset due to its useful life and usage.…

Q: What is the depreciation deduction each year, using each of the methods below, for an asset that…

A: Depreciation is the reduction in the value of assets due to normal wear and tear, passage of time,…

Q: You are to create a year-by-year depreciation schedule for an asset that has a cost basis (B) of…

A: The salvage Value is $80,000 The price of the Equipment is $950,000 Project life is 10 years To…

Q: A certain company makes it a policy that for any new piece of equipment, the annual depreciation…

A: The above mentioned questions solutions given in the following steps for your references.

Q: A new barcode reading device has an installed cost basis of $22,820 and an estimated service life of…

A: The declining balance method is the method of calculating depreciation where higher depreciation is…

Q: A new barcode reading device has an installed cost basis of $21,490 and an estimated service life of…

A: The calculation of depreciation expense for the year eight, book value at the end of year seven and…

Q: What is the depreciation each year for a trailer that cost $10,000 new, has a life of 5 years, and a…

A: Every fixed asset loses its value over a period. Depreciation is recorded on the cost of assets to…

Q: A piece of equipment is available for purchase for ($12000), has an estimated useful life of (5…

A: Depreciation is a reduction of value of asset over useful life due to wear and tear, obsolescence…

Q: Suppose you purchase a tangible asset with a book value of $700,000. The salvage value is $ 100,000.…

A: The total depreciation expense recorded for an asset since its acquisition is known as accumulated…

Q: A new barcode reading device has an installed cost basis of $23,790 and an estimated service life of…

A: The depreciation expense is charged on fixed assets as reduction in the value of fixed assets with…

Q: The price of equipment is available for purchase (15000) $ has an estimated useful life of 10 years…

A: solution given Price 15000 Useful life 10 years Salvage value 5000 Using…

Q: An equipment has an initial cost of 20,000 and a salvage value of 5,000 after 12 years. Find the…

A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…

Q: Using straight-line depreciation, what is the book value after 2 years for an asset costing $152700…

A: Annual depreciation = (Cost - Salvage value)/Useful life Accumulated depreciation = Annual…

Q: A classical straight-line depreciation of a $100,000 asset takes place over a 5-year warranty…

A: Salvage value: Salvage value can be defined as an estimated value of an asset that is left after…

Q: a. The book value after five years using straight-line depreciation is $ (Round to the nearest cent…

A: Depreciation is the deduction in the value of fixed asset over the life of the asset. In straight…

Question

If an asset book-depreciates by the DDB method over a 10-year period, how long will it take to reach its
salvage value if the estimated salvage is 20% of the first cost? Remember, assets can continue to
depreciate after they have reached their salvage value.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

1. An engineer with Accenture Middle East BV in Dubai was asked by her client to help understand the difference between 175% DB and DDB depreciation. If B = Php 195,000, n = 11 years, and S = Php 25,000: a. What are the book values for both methods after 10 years? b. What are the salvage values after the useful life?
Assume that an asset has a first cost of P94,158.00 and an expected salvage value of P15,613.00 after 12 years. Calculate the book value directly at the end of year 4.
How would you calculate the depreciation of an asset using the sum of digits method if the asset has an initial cost of Rs. 10,000, a salvage value of Rs. 2,000, and an estimated useful life of 5 years?
Given a cost of a depreciable fixed asset of $24,000 with a salvage value of $2,000 and a life of 5 years, what is the annual depreciation of the fixed asset using the straight-line method? What would be the depreciation in the second year if it used the declining balance method at double the straight-line rate? In regards to question #1, if the company used the straight-line method and sold the asset after 4 years for $7,000, what would be the journal entry needed to record the transaction? What if they sold it for $5,000?
A manufacturing machine has a first cost of $50 thousand with a $22 thousand salvage value after 11 years. Find the book value at year 6 using simple Declining Balance (DB) Depreciation.
A $100,000 asset has a $20,000 salvage value after its 10-year useful life. The depreciation allowance using straight-line depreciation is closest to what value? (a) $2000 (b) $8000 (c) $10,000 (d) $12,000?
Which one of the following would correctly describe the net realisable value of a two year old asset? Select one alternative The original cost of the asset less two years' depreciation The cost of an equivalent new asset less two years' depreciation The amount that could be obtained from selling the asset, less any costs of disposal The present value of the future cash flows obtainable from continuing to use the asset
ABC Corporation makes it a policy that for any new equipment purchased, the annual depreciation cost should not exceed 20% of the first cost at any time with no salvage value. Determine the length of service life necessary if the depreciation used is the SYD method.
5.Suppose that the purchase price of a piece of equipment is $1million.its salvage value at the end of its 5 years service life is $500000.Depreciate this asset using straight line depreciation and declining balance depreciation.
If an item is capitalized why do you think different depreciation methods are allowed? Does the depreciation method chosen impact Net Income in the short term? What about over the life of the asset? Assume you have an asset with original cost of $150,000 and accumulated depreciation of $30,000 when you spend $10,000 on the asset. If the $10,000 is an ordinary repair what is the Book Value Before and the Book Value after the $10,000 expenditure? If the $10.000 expenditure is an Extraordinary Repair (extends the life of the asset) and is recorded as a debit to Accumulated Depreciation and a credit to Cash What is the Book Value Before and the Book Value after the $10,000 expenditure? if the expenditure is a Betterment (improves the function of the asset) and is recorded as a debit to the asset and a credit to Cash. What is the Book Value Before and the Book Value after the $10,000 expenditure?
Find the book value of office equipment purchased at a cost C at the end of the nth year if it is to be depreciated by the double declining-balance method over 10 years. (Assume a salvage value of $0. Round your answer to the nearest cent.) C = $100,000, n = 9 $=
Assuming modified accelerated cost-recovery-system depreciation and an economic life of five years, what is the book value after three years of an asset of initial cost P? OA. 0.288P OB. 0.422P OC. 0.808P OD. 0.852P