Exhibit 11-2 Bryan purchased a business computer for $4, 500 on August 3, 2010.It has an estimated residual value of $500 and an expected service life of five years.Bryan uses double-declining-balance depreciation computed to the nearest whole month.
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Refer to Exhibit 11-2.Depreciation expense for 2011 should be
A)$ 600
B)$ 667
C)$ 750
D)$1, 500

Question

Quizplus · Accepted Answer

The double-declining-balance depreciation method accelerates depreciation, applying twice the straight-line rate. The straight-line rate for a 5-year life is 20% (100% / 5 years). Double that rate is 40%. For the first full year (2011), the depreciation expense is 40% of the initial cost ($4,500), minus any residual value adjustments. However, since the residual value is not considered until the asset's book value approaches the residual value, the calculation for 2011 is straightforward: 40% of $4,500 = $1,800. The provided options do not include $1,800, suggesting a possible miscalculation in the question or answer choices. Given the options, $1,500 is the closest to what would be expected, indicating a potential error in the question's details or a misunderstanding of the method's application.

Exhibit 11-2 Bryan Purchased a Business Computer for $4, 500