[neo10neo]

On September 5th , 2009 Apollo purchased equipment costing $40,000 with an estimated life of 6 years and an estimated salvage value of $4,000. Compute the depreciation expense Apollo would recognize on this equipment in 2009 assuming.
a. Straight-Line depreciation rounding fractional time to the nearest month
b. Declining balance at 200% rate using the half year convention

[Just Looking]

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[neo10neo]

Okay... I'll post what I've worked through.

[neo10neo]

Here's what I worked through so far.
cost - residual value/ useful life in yrs

40,000 - 4,000 / 6 years = 36,000 / 6

36,000 / 6 = 6,000 per year
4 months (500 a month)
500 x 4 = 2000

[pready]

Looks good. Your $6,000 * 4/12 (number of months / 12 months) = $2,000

For double declining balance the formula is your cost of $40,000 * 1/6 (this is your years of depreciaton in a fraction) * 200% * 6/12 (number of months / 12 months).

Remember your book value of your asset cannot go below your salvage value. On homework questions in the last year of depreciation the depreciation will have to be adjusted to get the right amount of depreciation expense for the final year of depreciation.