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A machine is purchased on January 1, 2018, for $124,000. It is expected to have a...

A machine is purchased on January 1, 2018, for $124,000. It is expected to have a useful life of ten years and a residual value of $22,000. The company closes its books on December 31. Under the double-declining balance method, what is the total amount of depreciation to be expensed during the 2019?

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Answer #1
Calculation of depreciation by double declining method
Calculation of Depreciation Rate under DDB:
(100%/Useful life ) x 2 = (100%/10 years) x 2 = 20%
Calculation of depreciation expense for year 2019:
Year Beginning Balance Depreciation Rate Depreciation expense (Beginning balance x Depreciation rate) Closing Balance
2018 $1,24,000 20% $24,800 $99,200
2019 $99,200 20% $19,840 $79,360
Therefore, the double-declining balance (DDB) depreciation expense in year 2019 should be $19,840.
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