Respuesta :
The book value for year 4 according to the double-declining balance depreciation method is $118,519.
What is the double declining balance method?
A double-declining balance method is a type of accelerated depreciation method in which the asset value is depreciated twice as fast as the straight-line method.
Calculation of the depreciation at the end of the year 1 is :
Depreciation = Cost of the equipment × 2/expected life
= $600,000*2/6
= $ 200,000
The book value at the end of the year 1 = $ 600,000 - $ 200,000
= $ 400,000
Calculation of depreciation at the end of the year 2 is :
Depreciation = Book value at the end of year 1 × 2/expected life
= $400,000*2/6
= $ 133,333
The book value at the end of the year 2 = $ 400,000 - $133,333
= $ 266,667
Calculation of depreciation at the end of the year 3 is :
Depreciation = Book value at the end of year 1 × 2/expected life
= $266,667*2/6
= $ 88,889
The book value at the end of the year 3= $266,667 - $ 88,889
= $ 177,778
Calculation of depreciation at the end of the year 4 is :
Depreciation = Book value at the end of year 1 × 2/expected life
= $177,778*2/6
= $ 59,259
∴ The book value at the end of the year 4 = $ 177,778 - $ 59,259
= $ 118,519
Therefore, $118,519 is the book value for year 4 according to the double declining balance depreciation method.
To learn more about, double declining balance method, click here:
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