Answer:
Depreciation expense for 2017: $26,400
The book value of the equipment at December 31, 2017: $45,600
Explanation:
Under the straight-line method, useful life is 5 years, so the asset's annual depreciation will be 20% of the Depreciable cost.
Depreciable cost = Total cost of the equipment - Residual value = $72,000 - $6,000 = $66,000
Under the double-declining-balance method the 20% straight line rate is doubled to 40% - multiplied times the Depreciable cost's book value at the beginning of the year.
Depreciation expense for 2017 = 40% x $66,000 = $26,400
Accumulated depreciation at December 31, 2017 = $26,400
Book value of the equipment at December 31, 2017 = Cost of the equipment - Accumulated depreciation at December 31, 2017 = $72,000 - $26,400 = $45,600
