Battle Co.purchased a new truck for $36, 000 on June 1, 2010, with a useful life of eight years and a residual value of $4, 800.If the company used double-declining-balance depreciation computed to the nearest whole year, depreciation expense for 2011 was

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Quizplus · Accepted Answer

The double-declining-balance method involves doubling the straight-line depreciation rate. The straight-line rate is 1/8 = 12.5%, so double is 25%. For 2010, depreciation is 25% of $36,000 = $9,000. For 2011, it's 25% of ($36,000 - $9,000) = $6,750.

Battle CoPurchased a New Truck for $36, 000 on June 1