Answer:
Book value at end of Year 6 = 153,180.37 pesos
Explanation:
Provided cost of asset = 450,000 pesos
Salvage value = 80,000 pesos
Straight line depreciation with life of 10 years [tex]\frac{450,000-80,000}{10} = 37,000[/tex]
Depreciation rate = [tex]\frac{37,000}{450,000} \times 100 = 8.22%[/tex]
Rate of depreciation under double declining method = 8.22 [tex]\times[/tex] 2 = 16.44%
Thus,
Value at end of
Year 1 = 450,000 - 16.44% = $376,020
Year 2 = 376,020 - 16.44% = $314,202.312
Year 3 = 314,202.312 - 16.44% = 262,547.452
Year 4 = 262,547.452 - 16.44% = 219,384.65
Year 5 = 219,384.65 - 16.44% = 183,317.814
Year 6 = 183,317.814 - 16.44% = 153,180.37
Thus, book value at end of Year 6 = 153,180.37 pesos
