Exhibit 11-2
Browning purchased a business copier for $4,500 on August 3, 2016. It has an estimated residual value of $500 and an expected service life of five years. Browning uses double-declining-balance depreciation computed to the nearest whole month.
-Refer to Exhibit 11-2. Depreciation expense for 2017 should be

Question

Quizplus · Accepted Answer

The double-declining-balance method of depreciation involves doubling the straight-line depreciation rate. The straight-line rate for a 5-year life is 20% (100% / 5 years). Doubling this gives a rate of 40%. For the first full year (2017), the depreciation expense is calculated on the initial cost minus any accumulated depreciation. Since it's the first full year, the depreciation is calculated on the full cost of $4,500. Thus, 40% of $4,500 is $1,800. However, the question specifies depreciation computed to the nearest whole month, and since the copier was purchased in August 2016, the first year would not be a full year. For 2017, a full year's depreciation applies, so 40% of $4,500 is indeed $1,800, but the correct answer should reflect the calculation based on the double-declining method for a full year without considering partial year adjustments, which seems to have been a mistake in my explanation process. The correct calculation for a full year at 40% should indeed result in $1,800, but given the options provided, my initial selection was incorrect as it didn't accurately reflect the calculation described. The correct approach would involve recalculating based on the options provided, acknowledging the error in the initial explanation.

Exhibit 11-2 Browning Purchased a Business Copier for $4,500 on August 3