Corales Company acquires a delivery truck at a cost of $77,000. The truck is expected to have a salvage value of $8,000 at the end of its 5-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method. I have tried calculating 3x's and no luck. This is my answers that I came up with Straight Line Depreciation: (77,000-8,000)/5/77,000=0.18, Reducing Balance Depreciation Rate: 2*0.18=0.36 or 36% Annual Depreciation Under Declining Balance Method: Year 1: $77,000 x 36% = $27,720 Depreciation Year 2: ($77,000 - 27,720) x 36% = $17,740.80

Double Declining Method

Depreciation : Year 1= 27,720

Depreciation : Year 2= 17,740.80

Depreciation : Year 3= 11,354.4

Depreciation : Year 4= 7266.816

Depreciation : Year 5= 4650.76  Residual Value at the end of 5th year = $ 8287

Explanation:

Straight Line Depreciation: (77,000-8,000)/5/77,000=0.18,

Reducing Balance Depreciation Rate: 2*0.18=0.36 or 36% Annual Depreciation Under Declining Balance Method:

Year 1: $77,000 x 36% = $27,720

Depreciation Year 2: ($77,000 - 27,720) x 36% = $17,740.80

Depreciation Year 3: ($77,000 -45460 ) = $31549 x 36% = $11,354.4

Depreciation Year 4: ($77,000 - 56814.4 ) = $20,185.6 x 36% = $ 7266.816

Depreciation Year 5: ($77,000 - 64081.22 ) = $ 12918.78 x 36% = $ 4650.76

At the end of the fifth year the accumulated depreciation will be $ 68,731 and the residual value of the truck will be 77,000 - 68713= 8287  which is almost equal to the given required value.

Under diminishing balance method we add up the depreciation and deduct from the total value and then apply the percent to the remaining value until we arrive at the desired given salvage or residual value.

answer; (cash) is the best out of the above; good luck

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know