On July 1, 2010, Jenkins Corporation purchased factory equipment for $300,000. Residual value was estimated to be $8,000.The equipment will be amortized over ten years using the double declining-balance method.Counting the year of acquisition as one-
Half year, Blenko should record depreciation expense for 2011 on this equipment of

Question

Quizplus · Accepted Answer

The double declining-balance method involves doubling the straight-line depreciation rate. For a 10-year life, the straight-line rate is 10%, so the double rate is 20%. For 2010, half-year depreciation is $300,000 x 20% x 0.5 = $30,000. The book value at the start of 2011 is $270,000 ($300,000 - $30,000). The full-year depreciation for 2011 is $270,000 x 20% = $54,000.

On July 1, 2010, Jenkins Corporation Purchased Factory Equipment for $300,000