On January 1, 2019, Beldon Inc. purchased a new machine for $60,000. Its estimated useful life is eight years with an expected salvage value of $6,000. Assuming double-declining balance depreciation, 2020 depreciation expense is:

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Quizplus · Accepted Answer

The double-declining balance rate is 25% (2/8). For 2019, depreciation is $60,000 * 25% = $15,000. The book value at the start of 2020 is $45,000. Depreciation for 2020 is $45,000 * 25% = $11,250.