Eckman Company purchased equipment for $40,000 on January 1, 2010, and will use the double-declining-balance method of depreciation.It is estimated that the equipment will have a 5-year life and a $2,000 residual value at the end of its useful life.The amount of depreciation expense recognized in the year 2012 will be

Question

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In the double-declining-balance method, the depreciation rate is double the straight-line rate. The straight-line rate is 1/5 = 20%, so the double rate is 40%. For 2012, the depreciation is 40% of the book value at the start of 2012, which is $14,400, resulting in $5,760.

Eckman Company Purchased Equipment for $40,000 on January 1, 2010