Rio Grande Company purchased equipment on January 1, 2010 for $75,000. The estimated useful life of the equipment is 5 years, the salvage value is $10,000, and the company uses the double-declining balance method to depreciate fixed assets. How much depreciation would Rio Grande record for the fourth year of the equipment's use?

Question

Quizplus · Accepted Answer

Assuming that Rio Grande Company kept the equipment for its entire five-year estimated useful life, the depreciation schedule on the equipment would be as follows. 11eb49ea_73d6_6fdf_ae87_61397f3bcd49_TB5406_00 __________________
* Because the equipment's book value can't drop below its estimated salvage value, depreciation expense for 2012 can't exceed $6,200.

Rio Grande Company Purchased Equipment on January 1, 2010 for $75,000