On July 1, 2017, Buffalo Corporation purchased factory equipment for $600,000.Residual value was estimated to be $16,000.The equipment will be depreciated over ten years using the double declining-balance method.Counting the year of acquisition as one-half year, Buffalo should record depreciation expense on this equipment for the calendar year 2018 of

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The double declining-balance method involves doubling the straight-line depreciation rate. The straight-line rate is 10% (1/10 years), so the double rate is 20%. For 2017, depreciation is $600,000 * 20% * 0.5 = $60,000. The book value at the start of 2018 is $540,000 ($600,000 - $60,000). Depreciation for 2018 is $540,000 * 20% = $108,000.

On July 1, 2017, Buffalo Corporation Purchased Factory Equipment for $600,000.Residual