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Homework answers / question archive / Tennessee Fried Chicken purchased equipment for $85,000 on 1/1
Tennessee Fried Chicken purchased equipment for $85,000 on 1/1. The equipment is expected to have a four-year life, with a residual value of $10,000 at the end of five years. Using the double- declining balance method, what is the depreciation expense for the year as of 12/31? Fill in the blank with your calculated number. DO NOT include commas, $ signs, period. decimal points, etc., just enter the raw number. Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $2 123, you would only input: 24123
Answer:
Depreciation Expense(Double Declining balance)=Book Value*(2*Straight Line Rate)
Straight Line Rate=1/Useful Life=(1/4)*100=25%
Thus;
Depreciation Expense=85000*(2*25)=85000*50%=42500
