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Accounting: Depreciation.

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Moped, Inc. purchased machinery at a cost of $22,000 on January 1, 2011. The expected useful life is 5 years and the asset is expected to have salvage value of $2,000. Moped depreciates its assets via the double-declining balance method.

What is the accumulated depreciation for this asset on December 31, 2012?
A. $4,400
B. $5,280
C. $8,800
D. $14,080

What is the firm's gain or loss if the machinery is sold for $11,000 on December 31, 2012?
A. Gain of $4,000
B. Gain of $3,080
C. Loss of $600
D. Loss of $4,000

Which of the following could be a correct journal entry to record the disposition of equipment? See attachment
A. Option A
B. Option B
C. Option C
D. Option D

Attachments
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Solution Summary

This solution deals with calculating the depreciation for an asset with double declining method.

Solution provided by:
Chidi Ngene, M. Sc.
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
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