Find the first year's depreciation, using the double-declining-balance method. Round to the nearest dollar.
-Cost: $3,400
Est. life: 6 years
Est. scrap: $800

Question

Quizplus · Accepted Answer

The double-declining-balance method of depreciation involves doubling the straight-line rate of depreciation. First, calculate the straight-line depreciation rate as 1/6 (since the estimated life is 6 years), which equals approximately 16.67%. Doubling this rate gives us 33.33%. The first year's depreciation on the cost of $3,400 is 33.33% of $3,400, which equals $1,133.33. Rounded to the nearest dollar, the first year's depreciation is $1,133.

Find the First Year's Depreciation, Using the Double-Declining-Balance Method