Answer is $54,000
Cost of Asset = $100,000
Salvage Value = $15,000
Useful Life = 5 years
Straight-line Depreciation Rate = 1 / Useful Life
Straight-line Depreciation Rate = 1 / 5
Straight-line Depreciation Rate = 20%
Double-declining Depreciation Rate = 2 * Straight-line
Depreciation Rate
Double-declining Depreciation Rate = 2 * 20%
Double-declining Depreciation Rate = 40%
October 1, Year 1 to September 30, Year 2:
Beginning Book Value = $100,000
Depreciation Expense = 40% * $100,000
Depreciation Expense = $40,000
Ending Book Value = $100,000 - $40,000
Ending Book Value = $60,000
October 1, Year 2 to December 31, Year 2:
Beginning Book Value = $60,000
Depreciation Expense = 40% * $60,000 * 3/12
Depreciation Expense = $6,000
Ending Book Value = $60,000 - $6,000
Ending Book Value = $54,000
Beckman Enterprises purchased a depreciable asset on October 1. Year 1 at a cost of $100.000....
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