Kingston Company purchased a piece of equipment on January 1, 2013. The equipment cost $120,000 and had an estimated life of 8 years and a residual value of $15,000. What was the depreciation expense for the asset for 2014 under the double-declining-balance method?

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The double-declining-balance method is a depreciation method that allocates a larger portion of the asset's cost to the early years of its life. The depreciation rate is twice the straight-line rate. The straight-line rate is calculated by dividing the depreciable cost of the asset by its estimated life. The depreciable cost of the asset is the cost of the asset minus its residual value. The double-declining-balance rate is twice the straight-line rate.The depreciable cost of the asset is $120,000 - $15,000 = $105,000. The straight-line rate is $105,000 / 8 = 13,125. The double-declining-balance rate is 2 * 13,125 = 26,250.The depreciation expense for the asset for 2014 is $120,000 * 26,250% = $22,500.

Kingston Company Purchased a Piece of Equipment on January 1