Farr Company purchased a new van for floral deliveries on January 1, 2021.The van cost $56,000 with an estimated life of five years and $14,000 salvage value at the end of its useful life.The double-declining-balance method of depreciation will be used.What is the depreciation expense for 2021?

Question

Quizplus · Accepted Answer

The double-declining-balance method calculates depreciation by doubling the straight-line rate. The straight-line rate is 1/5 or 20%, so the double rate is 40%. Depreciation for 2021 is 40% of $56,000, which is $22,400.

Farr Company Purchased a New Van for Floral Deliveries on January