The declining balance method involves applying a fixed depreciation rate to the remaining book value of...

The declining balance method involves applying a fixed depreciation rate to the remaining book value of an asset. True or False

Expert Solution

The declining balance method uses of fixed rate of depreciation and is applied on the book value of the Asset at the beginning of the Year or you can say that at the end of previous year.

Depreciation of the first year will be deducted from the cost of the asset which will give us the book value at the end of the first year now the depreciation rate for the second year will be applied on the book value at the end of first year and will give the depreciation for the second year which will be deducted from the book value of the first year and will get the book value for the second year.

Therefore the statement is True.

If you find the answer helpful please upvote.

ekkarill92 answered 2 years ago

4) Double-declining-balance depreciation: A) is an accelerated depreciation method. B) ignores the residual value in computing...

4) Double-declining-balance depreciation: A) is an accelerated depreciation method. B) ignores the residual value in computing depreciation, except during the last year. C) is based on the book value of the plant asset. D) is all of the above. 5) All of the following are needed to measure depreciation, EXCEPT for: A) cost. B) market value. C) estimated useful life. D) estimated residual value. 6) A depreciation method in which an equal amount of depreciation expense is assigned to each...

The method of depreciation was changed from the double-declining-balance method to the straight-line method in fiscal...

The method of depreciation was changed from the double-declining-balance method to the straight-line method in fiscal 2015. A machine was purchased on January 1, 2014 at a cost of $150,000. The machine has an estimated useful life of 10 years and a residual value of $9,000. What should have been booked as depreciation expense in fiscal 2015?

Complete the following depreciation table using the declining-balance method (twice straight-line rate). Auto: $26,000 &nbsp

Complete the following depreciation table using the declining-balance method (twice straight-line rate). Auto: $26,000 Estimated life: 10 years Residual value: $600 End of Cost of Acc. depr. Book value Annual Depr. Acc. depr. Book value Year asset B.O.Y B.O.Y. Expense E.O.Y. E.O.Y. 1 2 3 4 5 6 7 8 9 10 11

Which depreciation method is most frequently used in businesses today? Straight-line Declining-balance Units-of-activity Double-declining-balance Sargent Corporation...

Which depreciation method is most frequently used in businesses today? Straight-line Declining-balance Units-of-activity Double-declining-balance Sargent Corporation bought equipment on January 1, 2017. The equipment cost $130,000 and had an expected salvage value of $10,000. The life of the equipment was estimated to be 6 years. The total depreciable cost of the equipment is $120,000. $130,000. $140,000. $10,000. Sargent Corporation bought equipment on January 1, 2017. The equipment cost $130,000 and had an expected salvage value of $10,000. The life of...

Why might a corporation prefer double-declining balance as its method of depreciation? Why is the effective...

Why might a corporation prefer double-declining balance as its method of depreciation? Why is the effective interest rate method of amortizing bond discount and premium accepted as GAAP rather than straight-line method?

Using the double-declining balance method, calculate the annual depreciation expense that will be recorded each year...

Using the double-declining balance method, calculate the annual depreciation expense that will be recorded each year for an asset that cost $18,000, has a useful life of four years, and has an estimated salvage value of $3,600. Explain what accounting issue arises, if any, in the third and fourth years. Determine the depreciable cost. Cost -. Salvage value = Depreciable cost - = Complete the depreciation schedule using the double-declining balance method. (Complete all input boxes.) Book Annual Accumulated Year...

DBM: A property that is book-depreciated over a 10-year period by the Declining Balance Method has...

DBM: A property that is book-depreciated over a 10-year period by the Declining Balance Method has $27,208.81 book value on the 3rd year. Determine the assumed salvage value of the property (round-off k to 4 decimal places).

What is depreciation and the purpose? Does the book value of a fixed asset (cost minus...

What is depreciation and the purpose? Does the book value of a fixed asset (cost minus accumulated depreciation) communicate to a user what the asset is worth? Why or why not? Should the financial statements reflect the value of fixed assets? Why or why not?

ABC Company has the following asset on its books: Using the double declining balance depreciation method,...

ABC Company has the following asset on its books: Using the double declining balance depreciation method, what is the depreciation expense in years 1 through 4. Truck cost 31,000 Salvage value 1,000 Estimated life in years 4 Estimated life in miles 100,000 Miles driven in years 1 = 25,000, year 2 = 20,000, year 3 = 33,000, year 4 = 24,000 Question 9 options: a) year 1 = 7,500, year 2 =...

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment...

For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,800,000. Its useful life was estimated to be six years with a $220,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows: ($ in thousands) Year Straight-Line Declining Balance Difference 2018 $ 430 $ 933 $ 503 2019...

Question