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Asked Dec 17, 2019
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A storage tank acquired at the beginning of the fiscal year at a cost of $75,000 has an estimated residual value of $10,000 and an estimated useful life of 20 years. Determine the following: (a) the amount of annual depreciation by the straight-line method and (b) the amount of depreciation for the first and second years computed by the doubledeclining-balance method.

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Step 1

(a)

Calculate  the amount of annual deprec...

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(Cost of the asset-Residual value) Annual Depreciation Estimated useful life of the asset $75,000–$10,000 20 years $65,000 20 = $3, 250

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