Answer:
The amount of depreciation would be recorded in 2016 was $12,000
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 = $55,000 - $5,000 = $50,000
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 2015 = 40% x $50,000 = $20,000
At the beginning 2016, the Depreciable cost's book value is $50,000-$20,000 = $30,000
Depreciation expense for 2016 = 40% x $30,000 = $12,000
