Question

Kansas Enterprises purchased equipment for $74,500 on January 1, 2021. The equipment is expected to have a five-year life, with a residual value of $6,300 at the end of five years. Using the double-declining balance method, the book value at December 31, 2022, would be: (Do not round your intermediate calculations)

Answer 1

value at december 31th, 2022 $ 26,820

Step-by-step explanation:

double declining depreciation expense:

rate of depreciation: (1/useful life) x 2

(1/5) x 2 = 0.4 = 40%

first year:

depreciation 74,500 x 40% = 29,800

book value at year end 74,500 - 39,800 = 44,700

second year:

depreciation 44,700 x 40% = 17,880

book value at year-end 44,700 - 17,880 = 26,820

`\left[\begin{array}{ccccc}Year&Beginning&Dep-Expense&Acc. \: Dep&Ending\\0&-&-&-&74,500\\2021&74,500&29,800&29,800&44,700\\2022&44,700&17,880&47,680&26,820\\\end{array}\right]`