Refer to the information above. Assume that in its financial statements, Tilton Products uses the 150%-declining-balance method and the half-year convention. Depreciation expense in 2009 and 2010 will be:
A) $8,250 in 2009 and $14,953 in 2010.
B) $16,500 in 2009 and $12,964 in 2010.
C) $16,500 in 2009 and $16,500 in 2010.
D) $15,000 in 2009 and $11,786 in 2010.

Question

Quizplus · Accepted Answer

150% declining balance method with half-year convention means that the depreciation rate is 150% / 2 = 75% per year. The depreciation expense in 2009 is $30,000 * 75% = $22,500. The depreciation expense in 2010 is $22,500 * 75% = $16,875. However, since the half-year convention is used, the depreciation expense in 2010 is reduced by half, to $16,875 * 50% = $8,438. Therefore, the depreciation expense in 2009 is $22,500 and the depreciation expense in 2010 is $8,438.

Refer to the Information Above