On January 2, 2012, Mummy Corporation acquired equipment for $45,000. The estimated life of the equipment is 4 years. The estimated residual value is $5,000. What is the amount of depreciation expense for 2012, if the company 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 1/4 (25%) for a 4-year life. Double that rate is 50%. Depreciation for 2012 is 50% of $45,000, which is $22,500.

On January 2, 2012, Mummy Corporation Acquired Equipment for $45,000