Siver Manufacturing paid $75,000 (no residual value) for equipment with a useful life of 5 years...
Siver Manufacturing paid $75,000 (no residual value) for equipment with a useful life of 5 years on January 1. Silver uses the double-declining-balance method of depreciation. However, after two years, Silver changes to the straight-line method for depreciation purposes. What is depreciation expense in year 3?
Select one:
a. $5,400
b. $15,000
c. $13,500
d. $9,000
e. $16,000
Homework Answers
Double decline rate = 100/5*2 = 40%
Book value after two year = 75000*60%*60% = 27000
Depreciation expense 3 year = 27000/3 = 9000
So answer is d) $9000
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