Use the following information for questions
On January 1, 2022, Flowers Unlimited purchased a new delivery van.The van cost $35,000 with an estimated life of 5 years and $5,000 residual value.Double diminishing-balance depreciation will be used.
-What is the balance in the Accumulated Depreciation account at the end of 2023?
A)$22,400
B)$19,200
C)$12,600
D)$10,800

Question

Use the following information for questions 
On January 1, 2022, Flowers Unlimited purchased a new delivery van.The van cost $35,000 with an estimated life of 5 years and $5,000 residual value.Double diminishing-balance depreciation will be used.
-What is the balance in the Accumulated Depreciation account at the end of 2023?
A)$22,400
B)$19,200
C)$12,600
D)$10,800

Quizplus · Accepted Answer

The double diminishing-balance method calculates depreciation by doubling the straight-line rate. The straight-line rate is 1/5 = 20%, so the double rate is 40%. For 2022, depreciation is $35,000 * 40% = $14,000. For 2023, the book value is $35,000 - $14,000 = $21,000, and depreciation is $21,000 * 40% = $8,400. Accumulated depreciation at the end of 2023 is $14,000 + $8,400 = $22,400.

Use the Following Information for Questions