Answer:
Annual depreciation for the first year = $15,500
Annual depreciation for the second year = $7,500
Explanation:
Data provided in the question;
Cost of the delivery truck = $31,000
Salvage value = $4,000
Useful life = 4 years
Now,
The Rate of depreciation under declining-balance = 2 × straight-line rate
= 2 × [tex]\frac{1}{4}[/tex]
= 0.5
or
= 0.5 × 100% = 50%
Therefore,
Annual depreciation for the first year = cost of truck × Rate of depreciation
= $31,000 × 0.5
= $15,500
Annual depreciation for the second year
= Book value at the end of first year of truck × Rate of depreciation
= $15,500 × 0.5
= $7,500
