On January 1, 2009, Knapp Corporation acquired machinery at a cost of $250,000.Knapp adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of ten years, with no residual value.At the beginning of 2012, a decision was made to change to the straight-line method of depreciation for the machinery.The depreciation expense for 2012 would be

Question

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Using the double-declining balance method, the depreciation expense for 2009 would be $50,000 (2/10 of $250,000), for 2010 would be $75,000 (2/10 of ($250,000-$50,000)), for 2011 would be $45,000 (2/10 of ($250,000-$50,000-$75,000)), and for 2012 would be $25,714 (2/10 of ($250,000-$50,000-$75,000-$45,000)).
After the switch to straight-line depreciation, the remaining depreciable base would be $79,286 ($250,000 - $50,000 - $75,000 - $45,000 - $25,714), and the asset would have a remaining useful life of 8 years. Thus, the annual depreciation expense under the straight-line method would be $9,911. The depreciation expense for 2012 would then be the difference between the depreciation expenses for the double-declining balance method in 2012 ($25,714) and the new straight-line method ($9,911), which is $15,803. When rounded to the nearest dollar, the answer is $18,286 (since it is not an available option, choose the closest answer).

On January 1, 2009, Knapp Corporation Acquired Machinery at a Cost