Use the following information for questions

-Assuming, the double declining balance is used, what will be the net book value of component B at the end of year 1?
A)$205,714
B)$34,286
C)$80,000
D)$171,429

Question

Use the following information for questions 
 
-Assuming, the double declining balance is used, what will be the net book value of component B at the end of year 1?
A)$205,714 
B)$34,286 
C)$80,000 
D)$171,429

Quizplus · Accepted Answer

The double declining balance method involves depreciating the asset at twice the rate of the straight-line method. If the initial value of component B is $240,000, the depreciation for the first year would be 2*(1/7)*$240,000 = $68,571. The net book value at the end of year 1 would be $240,000 - $68,571 = $171,429.

Use the Following Information for Questions