Find the book value to the nearest dollar.
-Cost $7,090, life 6 years, scrap value $780 at the end of 3 years using double-declining balance
Method

Question

Quizplus · Accepted Answer

The double-declining balance method involves depreciating the asset at twice the straight-line rate. The straight-line rate is 1/6, so the double rate is 1/3. After 3 years, the book value is calculated as follows: Year 1: $7,090 * (1 - 1/3) = $4,727; Year 2: $4,727 * (1 - 1/3) = $3,151; Year 3: $3,151 * (1 - 1/3) = $2,101.

Find the Book Value to the Nearest Dollar