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. The accumulated depreciation balance at December 31, 2017, should be

Question

Quizplus · Accepted Answer

The double-declining-balance method involves depreciating the asset at twice the straight-line rate. The straight-line rate is 1/5 = 20%, so double is 40%. For 2016, depreciation is $4,500 * 40% * (5/12) = $750. For 2017, the book value is $4,500 - $750 = $3,750. Depreciation for 2017 is $3,750 * 40% = $1,500. Total accumulated depreciation by December 31, 2017, is $750 + $1,500 = $2,250.

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