**Use the following information for the Exercises below. (Algo)***[The following information applies to the questions displayed below.]*NewTech purchases computer equipment for $261,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $30,000.---**Exercise 8-8 (Algo) Double-declining-balance depreciation LO P1**Prepare a table showing depreciation and book value for each of the four years assuming double-declining-balance depreciation. *(Enter all amounts as positive values.)*| Year | Depreciation for the Period | End of Period ||--------|---------------------------------------------|---------------------------|| | Beginning-Year Book Value | Depreciation Rate | Annual Depreciation | Accumulated Depreciation | Year-End Book Value || Year 1 | | | | | || Year 2 | | | | | || Year 3 | | | | | || Year 4 | | | | | || Total | | | | | |This table is designed to calculate the depreciation and book value of the equipment over four years using the double-declining-balance method. Input values for each column to compute how the value of the asset decreases annually.

Depreciation rate as per double declining balance method = (100/useful life) ×2 = (100/4) ×2 = 50% Table showing depreciation and book value Year Beginning year book value Depreciation rate Annual Depreciation Accumulated Depreciation Year end book value Year 1 $261,000 50% $130,500 $130,500 $130,500 Year 2 $130,500 50% $65,250 $195,750 $65,250 Year 3 $65,250 50% $32,625 $228, 375 $32,625 Year 4 $32, 625 $2, 625 $231,000 $30,000 Total Thus depreciation in year 4 is restricted to $2, 625 because book value at end of asset should not be less than it's book value.

Business

Accounting

Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] NewTech purchases computer equipment for $261,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $30,000.

Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] NewTech purchases computer equipment for $261,000 to use in operating activities for the next four years. It estimates the equipment's salvage value at $30,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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