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Ponderosa Farms purchased some equipment on January 1,2020 for $12,600.The equipment has an estimated useful life of 10 years and an estimated residual value of $1,200.The company uses double-declining-balance depreciation.
-Depreciation expense for 2020 would be
A)$1,140.
B)$1,260.
C)$2,280.
D)$2,520.

Question

Quizplus · Accepted Answer

The double-declining-balance method calculates depreciation by doubling the straight-line rate. The straight-line rate is 1/10 = 10%. Double that is 20%. Depreciation for 2020 is 20% of $12,600, which is $2,520.

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