Posted by Kara on .
P Inc.purchased a $30,000 asset with a salvage value of$1,200 and an estimated useful life of three years.what is the book value at the end of years one and two using the 150% declining balance method?
Take 150% of the straight-line depreciation value each year. The straight-line depreciation for the first year would be (1/3)(30,000 - 1200) = 9600, and 150% of that is 14,400. That makes the book value after one year $15,600. Then use the same method for the second year.