Marmoset Corporation purchased factory equipment that was installed and put into service on January 2, 2017, at a total cost of $110,000.Residual value was estimated at $6,000.The equipment is being depreciated over four years using the double declining-balance method.For the calendar year 2018, Marmoset should record depreciation expense on this equipment of

Question

Quizplus · Accepted Answer

The double declining-balance method calculates depreciation by doubling the straight-line rate. The straight-line rate is 1/4 (25%) for four years, so the double rate is 50%. For 2017, depreciation is 50% of $110,000, which is $55,000. The book value at the start of 2018 is $55,000. Depreciation for 2018 is 50% of $55,000, which is $27,500.

Marmoset Corporation Purchased Factory Equipment That Was Installed and Put