DBM: A property that is book-depreciated over a 10-year period by the Declining Balance Method has $19,856

Finance Aug 08, 2020

DBM: A property that is book-depreciated over a 10-year period by the Declining Balance Method has $19,856.99 book value on the 4th year. Determine the first cost of the property (round-off k to 4 decimal places).

Expert Solution

Let the first cost of the propeerty be x

Year YearEnd Book value
1 =x-x/10*2=0.8x
2 =0.8x-0.8x*0.2=0.64x
3 =0.64x-0.64x*0.2=0.512x
4 =0.512x-0.512x*0.2=0.4096x

0.4096x=19856.99
=>x=19856.99/0.4096
=>x=48478.979492

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote