At the beginning of 2016 Copland Drugstore purchased a new c

Solution

Double Declining Balance Depreciation = Book Value at the beginning x Depreciation Rate

Depreciation Rate = 2 x [1 / Useful Life] = 2 x [ 1 / 5 ] = 40%

Double Declining Balance Depreciation Schedule

Year

Book Value at the beginning

Depreciation Rate

Annual Depreciation

Book Value at the end

1

52,000

40.00%

20,800

31,200

2

31,200

40.00%

12,480

18,720

3

18,720

40.00%

7,488

11,232

4

11,232

37.68%

4,232

7,000

5

-

-

-

-

The Asset has fully depreciated to it’s salvage value at the end of 4 year itself. Therefore, there e will not be any depreciation expense in year 5

Depreciation in Year 4 = $11,432 – 7,000 = $4,232