The method of depreciation was changed from the double-declining-balance method to the straight-line method in fiscal 2013. A machine was purchased on January 1, 2011 at a cost of $150,000. The machine has an estimated useful life of 10 years and a residual value of $9,000. What should have been booked as depreciation expense in fiscal 2012?

Question

Quizplus · Accepted Answer

The depreciation expense for the first year under the double-declining-balance method is $30,000 ($150,000 x 20%). The depreciation expense for the second year under the double-declining-balance method is $24,000 ($120,000 x 20%).

The Method of Depreciation Was Changed from the Double-Declining-Balance Method