Depreciation is the systematic and rational allocation of cost over a period of time.
For tax purposes, an item may be depreciated over a period of several years, n.With the straight-line method of depreciation, each year the item depreciates by 1/nth of its original value.With the double-declining-balance method of depreciation, each year the item depreciates by 2/nths of its value at the beginning of that year.(In the final year, it is depreciated by its value at the beginning of the year.)Write a Visual Basic program that performs the following tasks:
1. Request a description of the item, the year of the purchase, the cost of the item, the number of years to be depreciated (estimated life), and the method of depreciation.The method of depreciation should be chosen by clicking on one of two buttons.
2. Using the formulas below, calculate the amount of depreciation per year given the values entered by the user.You may assume a salvage value of $0.00 and a January 1 date of purchase for the year entered.Display a year-by-year description of the depreciation. See the diagram below.
Cost – Salvage Value= Depreciation amount per year
Estimated life in years
Using the entries in the diagram below:
1000 – 0 = $250 per year to be depreciated
Double the straight-line rate and multiple the result times the remaining balance
for every year until the last year of useful life.
For example, assume that using illustration of the straight-line method above
results in 25% depreciation per year.
1 / 4 years = 25%
The double-declining balance method results in 50% depreciation per year (twice
the straight-line rate).
Depreciation Year #1:
Initial cost year #1 = $1,000
Amount of depreciation = $500 (which is 50% x $1,000)
The balance to be depreciated over the next 3 years is $500 ($1,000 initial
cost – $500 depreciation in year 1)
Depreciation Year #2:
Remaining cost to depreciate $500
Amount of depreciation = $250 (which is 50%x $500)
The balance to be depreciated over the next 2 years is $250 ( $500 – 250)
Depreciation Year #3:
Remaining cost to depreciate $250
Amount of depreciation = $125 (which is 50%x $250)
The balance to be depreciated over the next 2 years is $125 ( $250 – 125)
Depreciation Year #4:
Remaining cost to depreciate $125
Since this is the last year of depreciation, the remaining $125 is
3. Note that in your output, you must indicate the remaining balance of the item at the beginning of the year,followed by the amount of depreciation to be taken during the year, and finally followed by the totalamount of accumulated depreciation on the asset since its purchase.
4. Make sure you use good software design principles, such as clearing the listbox after a user clicks a button but before new results are displayed.
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