An asset costs $80,000 and has a salvage value of $7,000. It has a four-year life. Using double- declining-balance depreciation, year 1 depreciation would be:

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The double-declining-balance depreciation method accelerates depreciation, applying double the straight-line depreciation rate. The straight-line rate for a 4-year life is 25% (100% / 4 years), so the double-declining rate is 50%. Year 1 depreciation is 50% of $80,000, which is $40,000.

An Asset Costs $80,000 and Has a Salvage Value of $7,000