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An asset has a cost of $50,000, with a residual value of $10,000. It has a life of 5 years and was purchased on January 1. Under double-declining-balance, what’s the asset’s fourth full year of depreciation expense?

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Answer:

Under double-declining-balance, the fourth full year of depreciation expense is 4320

Explanation:

Schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under double-declining-balance methods is attached.  

Depreciation expense formula is

DE=Carrying Value of the year before x Depreciation rate x 2

Double-declining-balance  

Depreciation rate   20,00%

Year  depreciation expense

0  

1 20000

2 12000

3 7200

4 4320

5 2592

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