The cost of an asset is 1010000 and its residual value is

The cost of an asset is $ 1010000?, and its residual value is $ 220000. Estimated useful life of the asset is five years. Calculate depreciation for the first year using the double-declining-balance method of depreciation.? (Do not round any intermediate? calculations, and round your final answer to the nearest? dollar.)

Solution

Depreciation rate as per straight line method=(100/5)=20%/year

Hence depreciation as per double decline balance method=2*Depreciation rate as per straight line method*Beginning value of each period

Hence depreciation for the first year=$1010000*(2*20%)

=$404000.