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Moped, Inc. purchased machinery at a cost of $44,000 on January 1, 2020. The expected useful life is 5 years and the asset is expected to have salvage value of $4,000. Moped depreciates its assets using the double-declining balance method. What is the firm's depreciation expense for the year ended December 31, 2020?

Answer :

Answer:

$17,600

Explanation:

Depreciation expense using the double declining method = Depreciation factor × cost of asset

Deprecation factor = ( 1 / useful life of machine) × 2

(1/5) x 2 = 0.4

Deprecation expense = 0.4 x $44,000 = $17,600

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Answer:

Depreciation for the year ended dec 31 2020 = $ 17600

Explanation:

Cost of asset = 44000

Useful life = 5 years

Salvage value = 4000

depreciation rate = 1/usefull life * 100 = 1/5 * 100 = 20%

Double declining formula = 2 * cost of asset * depreciation rate

                                          = 2 * 44000 * 20%

                                         = 88000 * 20%

                                         = 17600

                                 

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