Equipment acquired at the beginning of the year at a cost of $280,000 has an estimated residual value of $45,000 and an estimated useful life of 16 years. Determine (a) the double-declining-balance rate and (b) the double-declining-balance depreciation for the first year.
Answer:
a. 12.5% = [(1/16) × 2]
b. $35,000 ($280,000 × 12.5%)