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Western Farms purchased some equipment on January 1, 2011 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 amortization.
-Amortization expense for 2011 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 years = 10%. Double that rate is 20%. The depreciation for 2011 is 20% of $12,600, which equals $2,520.

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