Using the double-declining balance method, depreciation for 2013 and the book value at December 31, 2013, would be:
A)$26,400 and $45,600.
B)$28,800 and $43,200.
C)$28,800 and $37,200.
D)$26,400 and $36,600.

Question

Quizplus · Accepted Answer

The double-declining balance method uses a depreciation rate that is double the straight-line method. To calculate the rate, we divide 100% by the useful life of the asset, and then multiply by 2. In this case, the useful life is 5 years, so the depreciation rate is 40% (2 x 100% / 5).

Using this rate, we can calculate the depreciation expense for each year:

Year 1: $72,000 x 40% = $28,800 
Year 2: ($72,000 - $28,800) x 40% = $17,280 
Year 3: ($72,000 - $28,800 - $17,280) x 40% = $10,368

So, depreciation for 2013 would be $28,800 (Year 1), and the book value at December 31, 2013, would be $43,200 ($72,000 - $28,800).

Therefore, the best choice is B.

Using the Double-Declining Balance Method, Depreciation for 2013 and the Book