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Problems 7-12 use the following information:  A firm purchased a new piece of equipment with an estimated...

Problems 7-12 use the following information:  A firm purchased a new piece of equipment with an estimated useful life of five years.  The cost of the equipment was $55,000. The salvage value is estimated to by $5,000 at the end of year 5.

Using the Double-Declining Balance method of depreciation, what is the value of depreciation for year 5?

A.

2,128
B.

5,000
C.

2,851
D.

7,920
E.

7,128
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Answer #1

Answer :- (A) 2128

Explanation:-

as per double decline balance method depreciation is 200% of straight line method

SLM = $55000-$5000/5 = $10000 or in percentage it is 20%

as per double decline method = 20% *2 = 40%

Depreciation schedule:-

so here Depreciation value for year 5 is $2128

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