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2 cards from this section. Quick, good the night before a test.
What is depreciation?
Think about how assets lose value over time.
What is the Double Declining Balance Method?
Consider the first step in determining asset expenses.
What is the formula for the Double Declining Balance Method?
Think about how we calculate depreciation.
True or False: The salvage value is considered in the Double Declining Balance calculation.
Remember key points about book value data.
A piece of construction machinery costs $450,000 with a useful life of 8 years and a tire cost of $50,000. Calculate the depreciation expense for the first and second years using Double Declining Balance Method.
Remember to update book value after each calculation for the next year.
Using the same equipment, what would the bookkeeping process look like if the remaining book value hits the salvage value at the end of the fourth year? Explain how to adjust depreciation.
Think about maintaining financial integrity without undervaluing your assets.
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