Author Question: The original cost of a bus was 50,000 with an estimated life of 20 years. What is the second-year ... (Read 140 times)

sammy · **on:** Jun 24, 2018

The original cost of a bus was 50,000 with an estimated life of 20 years. What is the second-year depreciation?

Question 2

Lani bought a car at the beginning of the year for 28,000. The van has an estimated life of 10 years and a salvage value of 8,000 at the end of the 10-year period. What is the book value after the first year?

robbielu01 · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

4,500;
100 20 = 5
5 2 = 10
50,000 10 = 50,000 0.1 = 5,000
50,000 - 5,000 = 45,000
45,000 10 = 45,000 0.1 = 4,500

Answer to Question 2

26,000;
28,000 - 8,000 = 20,000
20,000 10 = 2,000
28,000 - 2,000 = 26,000