On January 1,2015,a machine has a remaining book value of $5,300.The residual value of the machine is $1,000.The company uses the double-declining-balance method of depreciation.If 2015 is the last year for depreciation,what is Depreciation Expense for the year ending December 31,2015?

Question

Quizplus · Accepted Answer

The double-declining-balance method of depreciation is calculated using the following formula:

Depreciation Expense = (Beginning Book Value - Accumulated Depreciation) x (2 / Useful Life)

For the first year, we need to calculate the beginning book value:

Beginning Book Value = Remaining Book Value + Accumulated Depreciation 
Remaining Book Value = $5,300 
Accumulated Depreciation = $0 
Beginning Book Value = $5,300

Now we can calculate depreciation expense for 2015:

Depreciation Expense = ($5,300 - $0) x (2 / 1) 
Depreciation Expense = $10,600

However, we need to take into account the residual value of $1,000. We can't depreciate the asset below its residual value, so we need to adjust the depreciation expense:

Depreciation Expense = $10,600 - $1,000 
Depreciation Expense = $9,600

Therefore, the answer is C) $4,300.

On January 1,2015,a Machine Has a Remaining Book Value of $5,300.The