On January 1,2018,Lamar,Inc.purchased equipment for $250,000.It has an estimated useful life of five years,and its residual value is $25,000.If it uses the double declining balance method,what is the amount of accumulated depreciation as of December 31,2019?

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost − Accumulated depreciation)× (2 ÷ Useful life)
For 2018:
= ($250,000 − $0)× (2 ÷ 5)= $100,000
For 2019:
= ($250,000 − $100,000)× (2 ÷ 5)= $60,000
Accumulated depreciation as of December 31,2019 = $100,000 + $60,000 = $160,000