Question

Vore Corp. bought equipment on January 2, 20X4 for $200,000. This equipment had an estimated useful life of five years and a salvage value of $20,000. Depreciation was computed by the 150% declining balance method.
The accumulated depreciation balance at December 31, 20X5 should be:

$98,000

$102,000

$91,800

$72,000

Answer 1

Answer:

Option B: $ 102,000

Explanation:

Depreciation Rate (as per double declining method) = 100 / Years * 1.5

A	Cost	$ 200,000
C	Number of years	5
(100/C*1.5) =D	Depreciation Rate (Double declining method)	30%

Therefore,

Year	Value at the beginning	Depreciation every year	Accumulated depreciation	Value at the end
20X4	$                      200,000	$                           60,000	$                                60,000	$            140,000
20X5	$                      140,000	$                           42,000	$                              102,000	$              98,000

In case of any doubt, please feel free to comment.