A company purchase a computer on July 1 2015 For $50,000. Estimated useful life

Question

A company purchase a computer on July 1 2015 For $50,000. Estimated useful life of the computer was five years. And it has no residual value. Which of the following methods should be used to best match the expense against the revenue it produce? A company purchase a computer on July 1 2015 For $50,000. Estimated useful life of the computer was five years. And it has no residual value. Which of the following methods should be used to best match the expense against the revenue it produce? A company purchase a computer on July 1 2015 For $50,000. Estimated useful life of the computer was five years. And it has no residual value. Which of the following methods should be used to best match the expense against the revenue it produce?

Explanation / Answer

Double decling balance method is best since in the early periods the revenue generated form the asset will be more. so that the double decling method depreciation expenses will match with the revenue generated by the computer which is higher in initial periods.

So Answer is Double decling balanbce method.

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