Question

Central Supply purchased a new printer for $67,500. The printer is expected to operate for nine (9) years, after which it will be sold for salvage value (estimated to be $6,750). How much is the first year’s depreciation expense if the company uses the double-declining-balance method?

Answer 1

Answer:

13.500

Explanation:

When using this method, the amount that arises from calculating depreciation in a straight line is doubled.

That is to say that the amortization will be equal to

Book value at the beginning of the year / Estimated useful life x 2 = Depreciation expense.

in these case for the first year it is

(67500-6750)/ 9 years x 2 = 13.500