Snowcat: cost 150,000, residual value 15,000, useful life 5 years, bought 1 January. Double-declining balance (rate 2 ÷ 5 = 40 %). Complete the figures.

Answer

Amortization expense, year 1 → 60000 · Amortization expense, year 2 → 36000 · Carrying amount, end of year 4 → 19440 · Amortization expense, year 5 → 4440 · Total amortization over the five years → 135000

Cells - Amortization expense, year 1 · ±0 - Amortization expense, year 2 · ±0 - Carrying amount, end of year 4 · ±0 - Amortization expense, year 5 · ±0 - Total amortization over the five years · ±0 Year 1: 150,000 × 40 % = **60,000** (carrying 90,000). Year 2: 90,000 × 40 % = **36,000** (54,000). Year 3: 21,600 (32,400). Year 4: 12,960 → carrying **19,440**. Year 5: the formula’s 7,776 would breach residual, so plug 19,440 − 15,000 = **4,440**. Total **135,000**. Excel: `=DDB(150000,15000,5,n)`, last year checked by hand.

Hermanson Vol 1 ch 10 (the double-declining-balance schedule; the comparison of methods); Lyryx Intermediate FA Vol 1 §10.2.3; Dauderis & Annand §8.2 (concept map K6–K7)