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An excavator costs ₹ 20,000/- and has an estimated life of 8 years. It has ho salvage value at the end of 8 years. The'book value of the excavator at the end of 3 years using genera! double declining balance methpd is
- a)₹ 8437.50
- b)₹ 8750.00
- c)₹ 10500.00
- d)₹ 11562.50
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
An excavator costs 20,000/- and has an estimated life of 8 years. It ...
This can be computed:as follows:
Depreciation in 1st year, using double declining balance method
Book value after 1st year
= 2000000 - 500000 = 1500000
Depreciation in 2nd year
Book value after 2nd year
= 1500000 - 375000 = ₹ 1125000
Depreciation in 3rd year
Depreciation in 1st year, using double declining balance method
Book value after 1st year
= 2000000 - 500000 = 1500000
Depreciation in 2nd year
Book value after 2nd year
= 1500000 - 375000 = ₹ 1125000
Depreciation in 3rd year
Most Upvoted Answer
An excavator costs 20,000/- and has an estimated life of 8 years. It ...
Calculation of Depreciation:
- The excavator has an estimated life of 8 years.
- Therefore, the depreciation rate per year using the general double-declining balance method would be 1/8 = 0.125 or 12.5%.
- In the first year, the depreciation expense would be 12.5% of the initial cost, which is $20,000. Thus, depreciation expense for the first year would be $2,500.
- In the second year, the depreciation expense would be 12.5% of the remaining book value, which is $20,000 - $2,500 = $17,500. Thus, depreciation expense for the second year would be $2,187.50.
- In the third year, the depreciation expense would be 12.5% of the remaining book value, which is $17,500 - $2,187.50 = $15,312.50. Thus, depreciation expense for the third year would be $1,914.06.
Calculation of Book Value at the end of 3 years:
- The book value at the end of 3 years would be the initial cost minus the accumulated depreciation for 3 years.
- The accumulated depreciation for 3 years would be $2,500 + $2,187.50 + $1,914.06 = $6,601.56.
- Therefore, the book value at the end of 3 years would be $20,000 - $6,601.56 = $13,398.44.
Therefore, the correct option is A) $8,437.50.
- The excavator has an estimated life of 8 years.
- Therefore, the depreciation rate per year using the general double-declining balance method would be 1/8 = 0.125 or 12.5%.
- In the first year, the depreciation expense would be 12.5% of the initial cost, which is $20,000. Thus, depreciation expense for the first year would be $2,500.
- In the second year, the depreciation expense would be 12.5% of the remaining book value, which is $20,000 - $2,500 = $17,500. Thus, depreciation expense for the second year would be $2,187.50.
- In the third year, the depreciation expense would be 12.5% of the remaining book value, which is $17,500 - $2,187.50 = $15,312.50. Thus, depreciation expense for the third year would be $1,914.06.
Calculation of Book Value at the end of 3 years:
- The book value at the end of 3 years would be the initial cost minus the accumulated depreciation for 3 years.
- The accumulated depreciation for 3 years would be $2,500 + $2,187.50 + $1,914.06 = $6,601.56.
- Therefore, the book value at the end of 3 years would be $20,000 - $6,601.56 = $13,398.44.
Therefore, the correct option is A) $8,437.50.
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An excavator costs 20,000/- and has an estimated life of 8 years. It has ho salvage value at the end of 8 years. Thebook value of the excavator at the end of 3 years using genera! double declining balance methpd isa)8437.50b) 8750.00c) 10500.00d) 11562.50Correct answer is option 'A'. Can you explain this answer?
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An excavator costs 20,000/- and has an estimated life of 8 years. It has ho salvage value at the end of 8 years. Thebook value of the excavator at the end of 3 years using genera! double declining balance methpd isa)8437.50b) 8750.00c) 10500.00d) 11562.50Correct answer is option 'A'. Can you explain this answer? for Civil Engineering (CE) 2024 is part of Civil Engineering (CE) preparation. The Question and answers have been prepared according to the Civil Engineering (CE) exam syllabus. Information about An excavator costs 20,000/- and has an estimated life of 8 years. It has ho salvage value at the end of 8 years. Thebook value of the excavator at the end of 3 years using genera! double declining balance methpd isa)8437.50b) 8750.00c) 10500.00d) 11562.50Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Civil Engineering (CE) 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for An excavator costs 20,000/- and has an estimated life of 8 years. It has ho salvage value at the end of 8 years. Thebook value of the excavator at the end of 3 years using genera! double declining balance methpd isa)8437.50b) 8750.00c) 10500.00d) 11562.50Correct answer is option 'A'. Can you explain this answer?.
An excavator costs 20,000/- and has an estimated life of 8 years. It has ho salvage value at the end of 8 years. Thebook value of the excavator at the end of 3 years using genera! double declining balance methpd isa)8437.50b) 8750.00c) 10500.00d) 11562.50Correct answer is option 'A'. Can you explain this answer? for Civil Engineering (CE) 2024 is part of Civil Engineering (CE) preparation. The Question and answers have been prepared according to the Civil Engineering (CE) exam syllabus. Information about An excavator costs 20,000/- and has an estimated life of 8 years. It has ho salvage value at the end of 8 years. Thebook value of the excavator at the end of 3 years using genera! double declining balance methpd isa)8437.50b) 8750.00c) 10500.00d) 11562.50Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Civil Engineering (CE) 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for An excavator costs 20,000/- and has an estimated life of 8 years. It has ho salvage value at the end of 8 years. Thebook value of the excavator at the end of 3 years using genera! double declining balance methpd isa)8437.50b) 8750.00c) 10500.00d) 11562.50Correct answer is option 'A'. Can you explain this answer?.
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