Question

31 Archie Co. purchased a framing machine for $55,000 on January 1, 2021. The machine is expected to have a four-year life, with a residual value of $2.000 at the end of four years. Using the double-declining-balance method, depreciation for 2022 and book value at December 31, 2022, would be: 2.5 points 01:32:34 Multiple Choice $13,750 and $13,750 respectively. $13,250 and $2,000 respectively. $13,750 and $11,750 respectively. O $13,250 and $41,750 respectively.

Answer 1

Calculation of depreciation by double declining method
Calculation of Depreciation Rate under DDB:
(100%/Useful life ) x 2 = (100%/4 years) x 2 = 50%
Calculation of depreciation expense for year 2022:
Year	Beginning Balance	Depreciation Rate	Depreciation expense (Beginning balance x Depreciation rate)	Closing Balance
2021	$55,000	50%	$27,500	$27,500
2022	$27,500	50%	$13,750	$13,750
Therefore, the double-declining balance (DDB) depreciation expense in year 2022 should be $13,750 and the book value at December 31, 2022 would be 13,750.
Hence, the first option is the correct answer.