Chuck Daniels Auto acquired a hydraulic lift on August 1,2018.The lift cost $165,000,had an estimated useful life of 10 years and a residual value of $16,500 at the end of its useful life.What amount of depreciation expense would be recognized under the double-declining-balance method for the year ending December 31,2018?
A)$13,750
B)$16,500
C)$33,000
D)$19,250

Question

Quizplus · Accepted Answer

The hydraulic lift was owned for five months during the year (August through December).
Depreciation = [(Cost − Accumulated Depreciation)× (2 ÷ Useful Life)] × Portion of year owned
= [($165,000 − $0)× (2 ÷ 10)] × (5 ÷ 12)= $13,750

Chuck Daniels Auto Acquired a Hydraulic Lift on August 1,2018