On January 2, 2012, Heidi's Pet Boutique purchased a $5,000 television for the dog sitting area. It had an estimated useful life of 5 years and a residual value of $1,000. What is the amount of depreciation expense for 2013, the second year of the asset's life using the double declining-balance method?

Question

Quizplus · Accepted Answer

Depreciation expense for the second year using the double declining-balance method is calculated as follows:Depreciation rate = (2 * Straight-line depreciation rate)= 2 * (1 / 5)= 40%Depreciation expense = Depreciation rate * Book value at the beginning of the year= 40% * ($5,000 - $800)= $1,200

On January 2, 2012, Heidi's Pet Boutique Purchased a $5,000