Josh Kindel purchased equipment for $60,000 on January 1.Its residual value is $4,000 with a useful life of 8 years.The amount of depreciation expense in the first year under the double-declining-balance method is:

Question

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The double-declining-balance method calculates depreciation by doubling the straight-line rate. The straight-line rate is 1/8 (useful life), so the double rate is 2/8 or 25%. The first year's depreciation is 25% of $60,000, which is $15,000.

Josh Kindel Purchased Equipment for $60,000 on January 1