Solar Products purchased a computer for $13,000 on July 1, 2010.The company intends to depreciate it over 4 years using the double-declining balance method.Residual value is $1,000.Depreciation for 2011 is

Question

Quizplus · Accepted Answer

The double-declining balance method involves depreciating the asset at twice the straight-line rate. The straight-line rate is 1/4 = 25%, so the double-declining rate is 50%. For 2010, depreciation is 50% of $13,000 = $6,500. The book value at the start of 2011 is $13,000 - $6,500 = $6,500. Depreciation for 2011 is 50% of $6,500 = $3,250. However, the correct choice is $4,875, which suggests a calculation error in the options or question.

Solar Products Purchased a Computer for $13,000 on July 1