Moreno Company purchased equipment for $450,000 on January 1, 2009, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 3-year life and a $20,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2011 will be

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In the third year (2011), the book value at the beginning of the year is $150,000. The double-declining rate is 2/3 = 66.67%. However, the depreciation should not reduce the book value below the salvage value of $20,000. Therefore, the depreciation expense for 2011 is $150,000 - $20,000 = $130,000, but since the book value cannot go below the salvage value, the depreciation expense is $30,000.

Moreno Company Purchased Equipment for $450,000 on January 1, 2009