Using the double-declining balance method, the book value at December 31, 2014, would be:
A)$14,400.
B)$24,960.
C)$27,360.
D)$25,920.

Question

Quizplus · Accepted Answer

To calculate the book value using the double-declining balance method, we first need to calculate the depreciation expense per year.

Depreciation expense = (2 / useful life) x initial cost

In this case, the useful life is 5 years and the initial cost is $81,000:

Depreciation expense = (2 / 5) x $81,000 = $32,400 per year

Now we can calculate the accumulated depreciation for each year:

Year 1: $32,400 
Year 2: $64,800 
Year 3: $64,800 
Year 4: $25,920 ($81,000 - $64,800)

Therefore, the book value at December 31, 2014 (the end of year 4) is:

$81,000 - $64,800 - $64,800 - $64,800 - $25,920 = $25,920

Using the Double-Declining Balance Method, the Book Value at December