Exhibit 11-2 Browning purchased a business copier for $4,500 on August 3, 2014. It has an estimated residual value of $500 and an expected service life of five years. Browning uses double-declining-balance depreciation computed to the nearest whole month.
-Refer to Exhibit 11-2. The accumulated depreciation balance at December 31, 2015, should be

Question

Quizplus · Accepted Answer

The annual depreciation using double-declining-balance method can be calculated as follows:
Annual Depreciation = (2/5) x Cost - Accumulated Depreciation
= (2/5) x $4,500 - Accumulated Depreciation
= $1,800 - Accumulated Depreciation

To find the accumulated depreciation balance at December 31, 2015, we need to calculate the depreciation for 2014 and 2015 and add them up:

Depreciation for August to December 2014 = (5/12) x $1,800 = $750
Depreciation for 2015 = $1,800 - $750 = $1,050
Accumulated Depreciation at December 31, 2015 = $750 + $1,050 = $2,250

Therefore, the correct answer is C.

Exhibit 11-2 Browning Purchased a Business Copier for $4,500 on August