Foyle Company purchased a new van for floral deliveries on January 1, 2016. The van cost $56,000 with an estimated life of 5 years and $14,000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the balance of the Accumulated Depreciation account at the end of 2017?

Question

Quizplus · Accepted Answer

The depreciation rate using the double-declining-balance method is 40% (100%/5*2). Therefore, the depreciation expense for 2016 is $22,400 ($56,000*40%), and the accumulated depreciation at the end of 2016 is $22,400.

The book value at the end of 2016 is $33,600 ($56,000 - $22,400).

The depreciation expense for 2017 is $13,440 ($33,600*40%), and the accumulated depreciation at the end of 2017 is $35,840 ($22,400 + $13,440).

Therefore, the correct answer is C, $35,840.

Foyle Company Purchased a New Van for Floral Deliveries on January