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ABC Ltd. purchased a new 3-D printer for $500,000 at the beginning of year 1. Although this printer is expected to last for 10 years, ABC knows the technology will become old quickly, and so they plan to replace this printer in 4 years. At that point, ABC would be able to sell the printer for $20,000. Calculate the net book value of the printer when at the end of year 2 using the declining balance method with a rate of 50%.

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anthougo

Using the declining balance method at 50%, the net book value of the printer at the end of year 2 is $125,000.

Data and Calculations:

Cost of 3-D printer = $500,000

Estimated useful life = 10 years

Scrap value at year 4 =$20,000

Declining balance rate = 50%

Book value at the end of year 1 = $250,000 ($500,000 - ($500,000 x 50%))

Book value at the end of year 2 = $125,000 ($250,000 - ($250,000 x 50%))

Accumulated Depreciation at the end of year 1 = $250,000 ($500,000 x 50%).

Accumulated Depreciation at the end of year 2 = $375,000 ($250,000 + $125,000).

Thus, using the declining balance method at 50%, the net book value of the printer at the end of year 2 is $125,000 ($500,000 - $375,000).

Learn more about the declining-balance method of depreciation here: https://brainly.com/question/25712030

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