Question

Tidy Limited purchased a new van on January 1, 2018. The van cost $36,000. It has an estimated life of six years and the estimated residual value is $3,600. Tidy uses the double-declining-balance method to compute depreciation. What is the adjusted balance in the Accumulated Depreciation account at the end of 2019

Answer 1

$18,002.88

Step-by-step explanation:

Depreciation Expense = 2 × SLDP × BVSLDP

Where,

SLDP = 100 ÷ Number of useful life

Therefore,

SLDP = 100 ÷ 6

= 16.67 %

2018

Depreciation Expense = 2 × 16.67 % × ($36,000 - $3,600)

= $10,802.16

2019

Depreciation Expense = 2 × 16.67 % × ($36,000 - $3,600 - $10,802.16)

= $7,200.72

Accumulated Depreciation at the end of 2019 :

Accumulated Depreciation = $10,802.16 + $7,200.72

= $18,002.88