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17 September, 05:54

On January 1, 2020, Danvers Company purchased a copy machine. The machine cost $800,000, its estimated useful life is 5 years, and its expected salvage value is $50,000. What is the depreciation expense for 2021 using the double-declining-balance method

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  1. 17 September, 07:08
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    The answer is $192,000

    Explanation:

    Double-declining-balance method is doubling the rate used.

    To find the rate:

    100percent:5years

    = 20%.

    Doubling the rate:

    20% x 2

    =40%

    Depreciation for December 31, 2020 is:

    0.4 x $800,000

    =$320,000.

    Net book value of the asset at the beginning of January 1, 2021 is:

    $800,000 - $320,000

    $480,000.

    Therefore, depreciation for December 31, 2021 is:

    $480,000 x 0.4

    =$192,000.

    Therefore depreciation for December 31, 2021 is $192,000
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