Harley Davis Inc. started its unicycle manufacturing business in 2018 and acquired $600,000 of equipment at...
Harley Davis Inc. started its unicycle manufacturing business in 2018 and acquired $600,000 of equipment at the beginning of 2018. It decided to use the double-declining balance (DDB) depreciation on its equipment with no residual value and a 10-year useful life. In 2020 it changed to the straight-line depreciation method. Depreciation computed for 2018-2019 is presented below:
Year DDB
2018 $120,000
2019 96,000
In 2020, what would Harley Davis report for depreciation expense?
Homework Answers
| Cost of Equipment | 600000 | |
| Less: Accumulated Depreciation | 216000 | =120000+96000 |
| Book value 2020 | 384000 | |
| Divide by Remaining life | 8 | =10-2 |
| Depreciation expense in 2020 | 48000 |
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