A FedEx sorting machine that cost 10000 with a useful life o

A FedEx sorting machine that cost $10,000 with a useful life of five years and a residual value of $2,000 was purchased on January 1. What is the DDB depreciation for each year? (Enter\"O\" for any zero balance.) DDB depreciation Year 1 Year 2 Year 3 Year 4 Year 5

Solution

Sorting Machine Cost 10,000 Useful Life 5 years Residual Value 2000 Straight line Rate =1/Number of year of useful life 20% =1/5 Beginning Net book value DDB Depreciation=Beginning Net Book value*SL Rate*2 Year1 10000 4000 =10000*20%*2 Year2 6000 =10000-4000 2400 =10000*20%*2 Year3 3600 =6000-2400 1600 =3600-2000 Since salvage is 2000 Year4 2000 =3600-1600 0 Year5 2000 0