Carr, Inc., purchased equipment for $100,000 on January 1, Year 1. The equipment

Question

Carr, Inc., purchased equipment for $100,000 on January 1, Year 1. The equipment had an estimated 10-year useful life and a $15,000 salvage value. Carr uses the 200% declining balance depreciation method. In its Year 2 income statement, what amount should Carr report as depreciation expense for the equipment? A. $13,600 B. $17,000 C. $20,000 D. $16,000 Carr, Inc., purchased equipment for $100,000 on January 1, Year 1. The equipment had an estimated 10-year useful life and a $15,000 salvage value. Carr uses the 200% declining balance depreciation method. In its Year 2 income statement, what amount should Carr report as depreciation expense for the equipment? A. $13,600 B. $17,000 C. $20,000 D. $16,000

Explanation / Answer

Car life 10 years Straight line depreciation rate =1/10 Straight line depreciation rate 10.00% Double decling balance depreciation rate 20.00% Year Opening WDV Depreciation @ 20% ClosingWDV                                                                                        1         100,000       (20,000)      80,000                                                                                        2           80,000       (16,000)      64,000 So 16000 depreciation will be charged in Year 2 hence Option D is correct

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---