On January 1, Year 1, Hills purchased equipment for $350,000. The equipment had an estimated useful...
On January 1, Year 1, Hills purchased equipment for $350,000. The equipment had an estimated useful life of ten years and an estimated residual value of $50,000. Use the double-declining-balance method to answer the following question(s).
Refer to Exhibit 11-1. How much depreciation should Hills record on the asset in year 2?
16,000
24,000
56,000
48,000
Homework Answers
Double declining rate = (2/useful life) = (2/10) = 20%
Depreciation for year 1 = 350,000 * 20% = 70,000
Depreciation for year 2 = (350,000-70,000)*20% = 56,000
Option C is the answer
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