On January 1, 2011, Gecho Corporation purchased computer equipment for $23,000. The equipment has an estimated useful life of 4 years and a salvage value of $400. Given this information, if Gecho uses the double-declining-balance method of depreciation and sells the equipment of December 31, 2012, for $250, it will have a

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The double-declining-balance method results in higher depreciation in the early years. For 2011, depreciation is $11,500 (50% of $23,000). For 2012, depreciation is $5,750 (50% of $11,500). The book value at the end of 2012 is $5,750 ($23,000 - $11,500 - $5,750). Selling for $250 results in a loss of $5,500 ($5,750 - $250).

On January 1, 2011, Gecho Corporation Purchased Computer Equipment for $23,000