Double Declining Method of Depreciation
Not what you're looking for?
Marsh Corporation purchased factory equipment that was installed and put into service January 2, 2004, at a total cost of $90,000. Salvage value was estimated at $6,000. The equipment is being depreciated over four years using the double-declining balance method. For the year 2005, Marsh should record depreciation expense on this equipment of
A. $21,000.
B. $22,500.
C. $42,000.
D. $45,000.
Purchase this Solution
Solution Summary
The solution outlines how much depreciation Marsh Corporation should record using the double declining depreciation method following an equipment purchase.
Solution Preview
To use the double declining method of depreciation, first we must find the depreciation rate.
To do this, we decide how long the asset will be depreciated. The problem tells us that we will depreciate the asset for 4 years. Divide 1/4 to get .25 or 25%. (If the depreciation was for 5 years, we would divide to get 1/5 or .20) This is the declining balance rate. ...
Purchase this Solution
Free BrainMass Quizzes
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.