Farr Company purchased a new van for floral deliveries on January 1 2017. The van cost $56000 with an estimated life of 5 years and $14000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the depreciation expense for 2017?

Question

Quizplus · Accepted Answer

The double-declining-balance method calculates depreciation by doubling the straight-line rate. The straight-line rate is 1/5 or 20%, so double is 40%. For 2017, depreciation is 40% of $56,000, which equals $22,400.

Farr Company Purchased a New Van for Floral Deliveries on January