If Desmet Company had used the double-declining balance depreciation method,the depreciation expense appearing on the 2012 income statement would be:

Question

Quizplus · Accepted Answer

To calculate the double-declining balance depreciation, we first calculate the straight-line rate, which is 1/5 = 0.20 or 20%. Then we double the straight-line rate to get the double-declining balance rate, which is 40%.

Using the double-declining balance method:

Year 1: (40% x $24,000) = $9,600
Year 2: (40% x ($24,000 - $9,600)) = $5,760
Year 3: (40% x ($24,000 - $9,600 - $5,760)) = $3,456
Year 4: (40% x ($24,000 - $9,600 - $5,760 - $3,456)) = $2,073.60
Year 5: (40% x ($24,000 - $9,600 - $5,760 - $3,456 - $2,073.60)) = $1,242.16

Therefore, the depreciation expense for 2012 using the double-declining balance method is $5,760. Answer choice B is the correct answer.

If Desmet Company Had Used the Double-Declining Balance Depreciation Method,the