Farr Company purchased a new van for floral deliveries on January 1, 2010. The van cost $36,000 with an estimated life of 5 years and $9,000 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 2010?

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%. Depreciation for 2010 is 40% of $36,000, which is $14,400.

Farr Company Purchased a New Van for Floral Deliveries on January