Refer to the information above. Assume that in its financial statements, Tilton Products uses the 200%-declining-balance method and the half-year convention. Depreciation expense in 2009 and 2010 will be:
A) $11,000 in 2009 and $19,250 in 2010.
B) $22,000 in 2009 and $12,571 in 2010.
C) $22,000 in 2009 and $7,857 in 2010.
D) $11,000 in 2009 and $22,000 in 2010.

Question

Quizplus · Accepted Answer

The 200%-declining-balance method results in depreciation expense of $22,000 in 2009 ($55,000 x 40%). The half-year convention reduces depreciation expense in 2009 by 50%, resulting in depreciation expense of $11,000 in 2009. Depreciation expense in 2010 is $19,250 ($55,000 x 40% x 50%).

Refer to the Information Above