Wexford Co.purchased a new delivery truck at the beginning of 2016.The truck has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000.A full year's depreciation expense is to be recorded in 2016.The truck was driven 20,000 miles during 2016 and 24,000 miles during 2017.The number of expected miles over five years is 100,000.

-Refer to information for Wexford Co.
By what amount would double-declining-balance depreciation exceed straight-line depreciation over the 5-year life of the truck?

Question

Wexford Co.purchased a new delivery truck at the beginning of 2016.The truck has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000.A full year's depreciation expense is to be recorded in 2016.The truck was driven 20,000 miles during 2016 and 24,000 miles during 2017.The number of expected miles over five years is 100,000.
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-Refer to information for Wexford Co. ​
By what amount would double-declining-balance depreciation exceed straight-line depreciation over the 5-year life of the truck?

Quizplus · Accepted Answer

Over the 5-year life of the truck, the total depreciation expense recognized will be the same under both the double-declining-balance method and the straight-line method. The difference lies in the timing of the expense recognition, not the total amount depreciated.