Question

Warren Company plans to depreciate a new building using the double declining-balance depreciation method. The building cost $960,000. The estimated residual value of the building is $66,000 and it has an expected useful life of 25 years. Assuming the first year's depreciation expense was recorded properly, what would be the amount of depreciation expense for the second year?

Answer #1

555.)
Mack Company plans to depreciate a new building using the double
declining-balance depreciation method. The building cost is
$800,000. The estimated residual value of the building is $50,000
and it has an expected useful life of 25 years.
What is the building's book value at the end of the first
year?
A.) $686,000
B.) $736,000
C.) $690,000
D.) $768,000

Opine Company uses the double-declining-balance method of
depreciation. It purchases a building with a cost of $560,000, a
salvage value of $32,000 and a useful life of 16 years. What is the
depreciation expense for the second year? A. $61,250 B. $60,000 C.
$57,750 D. $70,000 E. $66,000

Double-Declining-Balance Depreciation
A building acquired at the beginning of the year at a cost of
$76,400 has an estimated residual value of $3,100 and an estimated
useful life of four years. Determine the following.
(a)
The double-declining-balance rate
%
(b)
The double-declining-balance depreciation for the first
year
$

Computing Straight-Line and Double-Declining-Balance
Depreciation
On January 2, 2016, Fischer Company purchases a machine that
manufactures a part for one of its key products. The machine cost
$264,600 and is estimated to have a useful life of six years, with
an expected salvage value of $22,500.
Compute depreciation expense for 2016 and 2017 for the following
depreciation methods.
a. Straight-line.
b. Double-declining balance.
2016
2017
Straight-line
$Answer
$Answer
Double-declining
Answer
Answer

Using the Double Declining Balance (DDB)
depreciation method for equipment with an initial cost of $282,000,
an anticipated useful life of 10 years, and a salvage value of
$35,250, calculate the (a) depreciation rate, d=?,
(b) the Depreciation charge, D=?, at the end of
year 2, and (c) the Book Value, BV=?, at the end
of year 2.

A company purchased a computer system at a cost of $32,000. The
estimated useful life is 5 years, and the estimated residual value
is $5,000. Assuming the company uses the double-declining-balance
method, what is the depreciation expense for the second year?

Short Exercise 9-5
Double-Declining-Balance Method
Sunburn Fitness Center purchased a new step machine for $8,250.
The apparatus is expected to last four years and have a residual
value of $750. The step machine is depreciated using the
double-declining-balance method.
How much would depreciation expense be in each year? If
required, round your answers to the nearest cent.
Year 1:
$
Year 2:
$
Year 3:
$
Year 4:
$

1) Depreciation computed under double−declining−balance
will decrease each year because:
A.the book value used in the computation each year increases
B.the rate used in the computation each year decreases
C.the book value used in the computation each year decreases
D.the rate used in the computation each year increases
2) At the end of an asset's useful life, the balance in
Accumulated Depreciation will:
A.be greater under units−of−production depreciation than under
straight-line depreciation
B. be a greater amount under straight-line depreciation...

Annual depreciation expense on a building purchased a few years
ago (using the straight-line method) is $4,800. The cost of the
building was $96,000. The current book value of the equipment
(January 1, 2018) is $81,600. At the time of purchase, the asset
was estimated to have a zero salvage value. On January 1, 2018, the
company decided to reduce the original useful life by 25% and to
establish a salvage value of $4,800. The firm also decided
double-declining-balance depreciation...

Using the Double Declining Balance method to calculate
depreciation, which of the following statements is true:
a. Depreciation is calculated
taking the cost excluding salvage value, divided by the number of
years of anticipated service, and multiplying by 2.
b. Depreciation is calculated
using the cost divided by the number of estimated years of service,
multiplying by 2, posting this amount, and recalculating the
depreciation annually based on the balance left each year until the
only balance is the salvage...

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