Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost

Question

Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $132,000. The asset is expected to have a salvage value of $15,800 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be:

$118,800

$37,908

$25,272

$71,280

$28,512

Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $132,000. The asset is expected to have a salvage value of $15,800 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be:

Explanation / Answer

$71,280

Depreciation Schedule Year
Book Value
Year Start Depreciation
Percent Depreciation
Expense Accumulated
Depreciation Book Value
Year End 1 $132,000 10.00% $13,200 $13,200 $118,800 2 $118,800 40.00% $47,520 $60,720 $71,280 3 $71,280 40.00% $28,512 $89,232 $42,768 4 $42,768 40.00% $17,107 $106,339 $25,661 5 $25,661 38.43% $9,861 $116,200 $15,800

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