Answer:
Depreciation by December 31, 2019=$400,000
Explanation:
The expression for the accumulated depreciation is as follows;
accumulated depreciation=Acquisition cost-residual value
where;
acquisition cost=$1,000,000
residual value=$40,000
replacing;
depreciable cost=1,000,000-40,000=$960,000
depreciable cost=$960,000
The annual depreciation can be expressed as;
annual depreciation=depreciable cost/estimated life
where;
depreciable cost=$960,000
estimated life=5 years
replacing;
annual depreciation=960,000/5=192,000
annual depreciation=$192,000
depreciation rate=annual depreciation/depreciable cost×100
depreciable rate=(192,000/960,000)×100=20%
Since it is a double-declining depreciation rate we multiple the depreciable rate by 2;
(20%×2)=40%
Depreciation by December=carrying value×rate
Depreciation by December 31, 2019=1,000,000×40%=$400,000
