On January 2,2015,Kornis Corporation acquired equipment for $300,000.The estimated life of the equipment is 5 years or 40,000 hours.The estimated residual value is $20,000.What is the balance in Accumulated Depreciation on December 31,2015,if Kornis Corporation uses the double-declining-balance method of depreciation?

Question

Quizplus · Accepted Answer

The double-declining-balance method calculates depreciation by doubling the straight-line rate. The straight-line rate is 1/5 = 20%, so the double rate is 40%. For 2015, depreciation is 40% of $300,000, which is $120,000.

On January 2,2015,Kornis Corporation Acquired Equipment for $300,000