Calculating Depreciation
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The Blue Spruce Inn has purchased a shuttle bus to transport guests to and from a local ski lodge. The cost of the bus is $80000; its salvage value is $10000; and its life is five years.
Required:
Calculate the second year's depreciation under each of the following methods.
1. Straight-line
2. Sum of the years' digits
3. Double declining balance.
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Solution Summary
The solution explains how to calculate depreciation using Straight-line, Sum of the years' digits and Double declining balance method
Solution Preview
1. Straight-line
In straight line method the depreciation is the same every year
Depreciation per year = (Cost - Salvage Value)/Useful Life
Depreciation = ...
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