Farr Company purchased a new van for floral deliveries on January 1, 2014. The van cost €48,000 with an estimated life of 5 years and €12,000 residual value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the depreciation expense for 2014?

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 double is 40%. Depreciation for 2014 is 40% of €48,000, which is €19,200.

Farr Company Purchased a New Van for Floral Deliveries on January