A machine with a five-year estimated useful life and an estimated 10% salvage value was acquired on January 1, 2005.The depreciation expense for 2007 using the double-declining balance method would be original cost multiplied by

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Quizplus · Accepted Answer

The double-declining balance method uses twice the straight-line rate. For a 5-year life, the straight-line rate is 20%, so double is 40%. Depreciation for 2007 is based on the book value at the start of 2007, which is 60% of the original cost after two years of depreciation (100% - 40% - 40%). Thus, 60% × 40%.

A Machine with a Five-Year Estimated Useful Life and an Estimated