Question

On January​ 2, 2019, Kornis Corporation acquired equipment for $ 300 comma 000. The estimated life of the equipment is 5 years or 80 comma 000 hours. The estimated residual value is $ 40 comma 000. What is the balance in Accumulated Depreciation on December​ 31, 2019, if Kornis Corporation uses the doubleminusdecliningminusbalance method of​ depreciation?

Answer 1

$120,000

Step-by-step explanation:

The computation of the accumulated depreciation for the December 31,2019 using the double -declining method is shown below:

First we have to find the depreciation rate which is shown below:

= One ÷ useful life

= 1 ÷ 45

= 20%

Now the rate is double So, 40%

In year 1, the acquired cost is $300,000 , so the depreciation is $120,000 after applying the 40% depreciation rate