Question

On September 30, 2021, Bricker Enterprises purchased a machine for $220,000. The estimated service life is 10 years with a $26,000 residual value. Bricker records partial-year depreciation based on the number of months in service.

Depreciation for 2021, using the double-declining-balance method, would be: (Do not round intermediate calculations.)

Multiple Choice

• $44,000.

• $11,000.

• $38,800.

• $9,700.

Answer 1

Correct answer-----------$11,000

Working

Double declining Method
A	Cost	$ 220,000
B	Residual Value	$ 26,000
C=A - B	Depreciable base	$ 194,000
D	Life [in years]	10
E=C/D	Annual SLM depreciation	$ 19,400
F=E/C	SLM Rate	10.00%
G=F x 2	DDB Rate	20.00%

.

Depreciation schedule-Double declining
Year	Beginning Book Value	Depreciation rate	Depreciation expense	Accumulated Depreciation	Ending Book Value
2021	$ 220,000	20.00%	$ 11,000*	$ 11,000	$ 209,000

*For three months {(220000 x 20% ) x 3/12}