On January 1,2011,Ace Electronics paid $400,000 cash for a computer that would be used to store and process its accounting information.The computer has a 5-year useful life,after which it will be worthless because it will be obsolete.Ace Electronics uses the double-declining balance method to depreciate its assets.The book value of the computer at December 31,2011 is ________.

Question

Quizplus · Accepted Answer

Using the double-declining balance method, the depreciation expense for year one would be (2/5) x $400,000 = $160,000. Therefore, the book value at December 31, 2011 would be $400,000 - $160,000 = $240,000.

On January 1,2011,Ace Electronics Paid $400,000 Cash for a Computer