On January 2, 2017, Konan Corporation acquired equipment for $300,000. The estimated life of the equipment is 5 years or 100,000 hours. The estimated residual value is $40,000. What is the balance in Accumulated Depreciation on December 31, 2018, if Konan Corporation uses the double-declining-balance method of depreciation? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The double-declining-balance method calculates depreciation by doubling the straight-line rate. The straight-line rate is 1/5 = 20%, so the double rate is 40%. For 2017: $300,000 * 40% = $120,000. For 2018: ($300,000 - $120,000) * 40% = $72,000. Total accumulated depreciation by the end of 2018 is $120,000 + $72,000 = $192,000.

On January 2, 2017, Konan Corporation Acquired Equipment for $300,000