Question

Marlow Company purchased a computer system on January 1 for $4,400. This system has a useful...

Marlow Company purchased a computer system on January 1 for $4,400. This system has a useful life of 10 years and a salvage value of $400. What would be the accumulated depreciation at the end of the 1st year of its useful life using the double-declining-balance method?

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Answer #1
Ans. Double declining balance method:
Double declining balance depreciation rate = 2 * 1 / life of assets
2 * 1 / 10
0.20
*Depreciation expenses for year 1 = Cost of asset * Double declining balance depreciation rate
$4,400 * 0.20
$880
*Accmulated depreciation at the end of year 1 will be equal to the depreciation
expenses of year 1.
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