Question

a truck costing 25,000 with a residual value of 5,000 and a 10 year estimated life, what is the book value at 2 years

Answer 1

$25,000 - 5,000 = $20,000
Since the useful life is 10 years or 10% per year, double-declining rate would be 20%

Year 1
$20,000 x .2 = $4000
Book Value = $16,000

Year 2
$16,000 x .2 = $3,200
Book Value = ($16,000-3,200) = $12,800