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a_sh-v [17]
3 years ago
11

On January 1, 20X1, Cobalt Company purchased a building for $140,000 that has an estimated salvage value of $8,000 and an expect

ed useful life of ten years. 65. What is the depreciation expense for 20X1 using the double-declining-balance method?
Business
1 answer:
Assoli18 [71]3 years ago
4 0

Answer:

$28,000

Explanation:

Data provided in the question:

Cost of the building purchased = $140,000

Estimated salvage value = $8,000

Expected useful life = ten years

Now,

Annual rate of depreciation using the double-declining-balance method

= 2 × [ 100% ÷ (Useful life )]

= 2 ×  [ 100% ÷ 10 ]

= 2 × 10%

= 20% or 0.20

Therefore,

Depreciation expense for 20X1 = Cost of building × Rate of depreciation

= $140,000 × 0.20

= $28,000

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