Answer:
20X9 depreciation expense is $160
Explanation:
Under the straight-line method, useful life is 5 years, so the asset's annual depreciation will be 20%.
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.
In 20X6, depreciation expense = 40% x $10,000 = $4,000
At the beginning of the year 20X7, the truck cost's book value is $10,000-$4,000 = $6,000
In 20X7, depreciation expense = 40% x $6,000 = $2,400
In 20X8, depreciation expense = 40% x ($10,000 - $4,000 - $2,400) = $1,440
Accumulated depreciation at December 31 20X8 = $4,000 + $2,400 + $1,440 = $7,840
Book value at December 31 20X8 = $10,000 - $4,000 - $2,400 - $1,440 = $2,160
In 20X9, depreciation expense = $10,000 - $2,000 - $7,840 = $160
The 20X9 depreciation expense was $160 which is less than the actual $864 (40% of $2,160). It was done to keep the residual value as estimated ($2,000)
