NewTech purchases computer equipment for $267,000 to use in operating activities for the next four years. It estimates the equipment’s salvage value at $25,000.
Required:
Prepare a table showing depreciation and book value for each of the four years assuming double-declining-balance depreciation. (Enter all amounts positive values.)

NewTech purchases computer equipment for $267,000 to use in operating activities for the next four years. It estimates the equipment’s salvage value at $25,000.

Depreciable value= 267,000 - 25,000= 242,000

Year 1:

Beginning book value= 267,000

Depreciation= (267,000/4)*2= 133,500

Ending book value= 133,500

Year 2:

Beginning book value= 133,500

Depreciation= (133,500/4)*2= 66,750

Ending book value= 66,750

Year 3:

Beginning book value= 66,750

Depreciation= (66,750/4)*2= 33,375

Ending book value= 33,375

Year 4:

Beginning book value= 33,375

Depreciation= (33,375/4)*2= 16,688

Ending book value= 16,688

swatiupadhyay714 swatiupadhyay714 · Answer 2 · 2021-10-22T13:28:34+02:00

Depreciation is termed as the process of decrease in the value of any of the assets of the firm. This happens because the assets purchased by the firm get obsoleted within a certain period of time and this leads to depreciate or decrease in its price.

The following has been given in the question:

NewTech purchases computer equipment for $267,000 to use in operating activities for the next four years.

It estimates the equipment’s salvage value at $25,000.

[tex]\begin{aligned}\text{Depreciable value}&= \text{value of the assets} - \text{salvage value of the asset}\\ &= \text{\$267000-\$25000} \\&= \text{\$242000}\end{aligned}[/tex]

Year 1:

Beginning book value= $267,000

[tex]\begin{aligned}\text{Depreciation}&= \frac{\text{Book value}}{\text{years of depreciation}} \times 2}\\&=\frac{267,000}{4} \times2 \\ &= 133,500\end{aligned}[/tex]

Ending book value= $133,500

Year 2:

Beginning book value= $133,500

[tex]\begin{aligned}\text{Depreciation}&= \frac{\text{Book value}}{\text{years of depreciation}} \times 2\\&=\frac{133500}{4} \times2 \\ &= 66,750\end{aligned}[/tex]

Ending book value= $ 66,750

Year 3:

Beginning book value= $66,750

[tex]\begin{aligned}\text{Depreciation}&= \frac{\text{Book value}}{\text{years of depreciation}} \times 2\\&=\frac{66750}{4} \times2 \\ &= 33,375 \end{aligned}[/tex]

Ending book value= $ 33,375

Year 4:

Beginning book value= $33,375

[tex]\begin{aligned}\text{Depreciation}&= \frac{\text{Book value}}{\text{years of depreciation}} \times 2\\&=\frac{33,375}{4} \times2 \\ &= 16,688 \end{aligned}[/tex]

Ending book value= $16,688

To know more about depreciation and book value of the assets, refer to the link below:

https://brainly.com/question/17145548?referrer=searchResults