radebook ORION Downloadable eTextbook ment :53 PM/ Remaining: 45 min. NEXT Quest

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radebook ORION Downloadable eTextbook ment :53 PM/ Remaining: 45 min. NEXT Question 23 Pharoah Company purchased a new van for floral deliveries on January 1, 2016. The van cost $44000 with an estimated life of 10 years and $14000 salvage value at the end of its useful life. The double-declining-balance method of depreciation will be used. What is the balance of the Accumulated Depreciation account at the end of 20177 O$1760. $15840. $7040. $9680 o 0 Click if you would like to show work for this question: saver RLATERLE what Question Attempts: Oof 1 used

Explanation / Answer

Useful life = 10 years

Double declining rate of depreciation = 2 / Useful life = 2 / 10 years = 0.20 = 20%

Depreciation expense for 2016 = Cost of van * 20% = $44,000 * 20% = $8,800

Book value of van at the end of 2016 = $44,000 - $8,800 = $35,200

Depreciation expense for 2017 = $35,200 * 20% = $7,040

Accumulated depreciation at the end of 2017 = Depreciation expense for 2016+ Depreciation expense for 2017 = $8,800 + $7,040 = $15,840

Hence, correct answer is $15,840

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