Question

cutter enterprises purchased equipment for $75,000 on january 1, 2021. the equipment is expected to have a five-year life and a residual value of $4,200. using the double-declining-balance method, depreciation for 2021 and the book value at december 31, 2021, would be: book

Answer 1

Double Declining Depreciation rate = 1/5*2

Double Declining Depreciation rate = 40%

Double Declining Depreciation for 2021 = $75,000*40%

Double Declining Depreciation for 2021 = $30,000

Book value at December 31, 2021 = $75,000 - $30,000

Book value at December 31, 2021 = $45,000