Answer:
Results are below.
Explanation:
First, we need to calculate the annual depreciation using the straight-line method:
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (135,000 - 35,000) / 10
Annual depreciation= $10,000 per year
Now, using the double-declining balance:
Annual depreciation= 2*[(book value)/estimated life (years)]
Year 1:
Annual depreciation= 2*[(135,000 - 35,000) / 10]
Annual depreciation= $20,000
Year 2:
Annual depreciation= 2*[(100,000 - 20,000) / 10]
Annual depreciation= $16,000
Finally, using the units of production method:
Annual depreciation= [(original cost - salvage value)/useful life of production in trucks washed]*trucks washed
Year 1:
Annual depreciation= [100,000 / 50,000]*7,000
Annual depreciation= $14,000
Year 2:
Annual depreciation= 2*9,000
Annual depreciation= $18,000
