Tidy Limited purchased a new van on January 1, 2016. The van cost $20,000. It ha

Question

Tidy Limited purchased a new van on January 1, 2016. The van cost $20,000. It has an estimated life of Five years and the estimated residual value is $5,000. Tidy uses the double-declining-balance method to compute depreciation.

What is the adjusted balance in the Accumulated Depreciation account at the end of 2017?

$9,600.

$12,800.

$3,200

$4,800

Tidy Limited purchased a new van on January 1, 2016. The van cost $20,000. It has an estimated life of Five years and the estimated residual value is $5,000. Tidy uses the double-declining-balance method to compute depreciation.

What is the adjusted balance in the Accumulated Depreciation account at the end of 2017?

$9,600.

$12,800.

$3,200

$4,800

Explanation / Answer

Double Declining rate = 1/5 *2 = 0.4 40% Accumula Book year amount rate dep dep value 1 20,000 40% 8000 8,000 12,000 2 12,000 40% 4800 12,800 7200 Adjusted balance in the Accumulated deprciation account at the end of 2017 $12,800 answer

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