The method of depreciation was changed from the double-declining-balance method to the straight-line method in fiscal 2022. A machine was purchased on January 1, 2020, at a cost of $150,000. The machine has an estimated useful life of 10 years and a residual value of $9,000. What was booked as depreciation expense in fiscal 2020?

Question

Quizplus · Accepted Answer

In 2020, the double-declining-balance method would be used since the change to the straight-line method occurred in fiscal 2022. The double-declining rate for a 10-year useful life is 20% (2/10). Thus, the depreciation expense for 2020 is 20% of $150,000, which equals $30,000.

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