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11 June, 00:43

Kansas Enterprises purchased equipment for $80,500 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $8,400 at the end of five years. Using the double-declining balance method, depreciation expense for 2021 would be: (Do not round your intermediate calculations)

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  1. 11 June, 02:08
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    Depreciation Expense for 2021 would be $28,840

    Explanation:

    Double Declining balance method is the form of accelerated depreciation method, in which value of asset depreciated twice by the rate which is charged in straight line method.

    Depreciable Cost = Cost of Asset - Residual value

    Depreciable Cost = $80,500 - $8,400 = $72,100

    Double-declining-balance rate = [ 2 x Depreciable cost / Useful life ] / Cost of Asset

    Double-declining-balance depreciation = 2 x $72,100 / 5 = $28,840
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Home » Business » Kansas Enterprises purchased equipment for $80,500 on January 1, 2021. The equipment is expected to have a five-year service life, with a residual value of $8,400 at the end of five years.
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