Answer:
$38,000
Explanation:
Double-declining-balance method used its ratio by computing depreciation expense. By multiplying it against original cost. To get ratio we simply divide 100% over the life of an asset times 2.
100% / 10 years x 2 = 20%
First, we will compute the 2021 depreciation for us to know our base amount on year 2022.
$200,000 x 20% = $40,000 x3/12 = $10,000
we prorate the annual depreciation expense because part of it is applicable to 2021 and 2022.
For year 2022, we have two ways to compute.
First:
$200,000 x 20% = $40,000 x 9/12 = $30,000 (the portion of the first year’s depreciation that’s for January 1, 2022 to September 30,2022), plus
$200,000 - $40,000 = $160,000 (year 2 net book value)
$160,000 x 20% = 32,000 x 3/12 = $8,000 (portion of second year’s depreciation that for October 01, 2022 to December 31, 2022)
Or second, an alternative way to compute,
2021
$200,000 x 20% = $40,000 x 3/12=$10,000
2022
$200,000 - $10,000 = $190,000 (Net book value)
$190,000 x 20% = $38,000
*Residual value is ignored in computing depreciation expense under double-declining-balance method.
