Chapter 5A, Problem 3SEB

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

Chapter
Section

### College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

# DOUBLE-DECLININGBALANCE DEPRECIATION Using the information given in Exercise 5 Apx-1B, prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the double-declining-balance method.

To determine

Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the double-declining balance method.

Explanation

Double-declining balance method (Accelerated method):

In this method of depreciation, the diminishing value of the asset is taken into consideration for determining the depreciation for the succeeding years.

Prepare a depreciation schedule showing the depreciation expense, accumulated depreciation, and book value for each year under the double-declining balance method.

(Figure 1)

Excel workings:

(Figure 2)

Working Notes:

(1) Calculate the beginning book value for the second year:

BookÂ valueÂ duringÂ theÂ beginningÂ ofÂ theÂ secondÂ yearÂ Â }=(BookÂ valueÂ duringÂ theÂ beginningÂ ofÂ theÂ firstÂ yearÂ Â Â )âˆ’(Â DepreciationÂ expenseÂ duringÂ 1stÂ year)=$5,000âˆ’$2,000=$3,000 (2) Calculate the beginning book value for the third year: BookÂ valueÂ duringÂ theÂ beginningÂ ofÂ theÂ Â thirdÂ yearÂ Â }=(BookÂ valueÂ duringÂ theÂ beginningÂ ofÂ theÂ secondÂ yearÂ Â Â )âˆ’(Â DepreciationÂ expenseÂ duringÂ 2Â ndÂ year)=$3,000âˆ’$1,200=$1,800

(3) Calculate the beginning book value for the fourth year:

BookÂ valueÂ duringÂ theÂ beginningÂ ofÂ theÂ fourthÂ yearÂ Â }=(BookÂ valueÂ during

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