Double declining balance method of depreciation : Under this method, the depreciation is calculated by applying a fixed rate to the carrying value of the long term asset. The rate of depreciation is the double of the straight line depreciation. The annual depreciation under straight line method is multiplied with 2 to determine the declining balance depreciation rate. This is an accelerated depreciation method. It computes annual depreciation by multiplying the asset’s decreasing book value by a constant percentage rate i.e. two times the straight line depreciation rate. The formula for double declining balance method of depreciation is - a n n u a l d e p r e c i a t i o n = ( cos t − a c c u m u l a t e d d e p r e c i a t i o n ) * 2 * ( 1 / u s e f u l l i f e ) To determine: We have to determine the depreciation expense and record the depreciation expense for 2016 and sale of fixtures on October 31, 2016.

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Chapter 10, Problem E10.22E

To determine

Double declining balance method of depreciation:

Under this method, the depreciation is calculated by applying a fixed rate to the carrying value of the long term asset. The rate of depreciation is the double of the straight line depreciation. The annual depreciation under straight line method is multiplied with 2 to determine the declining balance depreciation rate.

This is an accelerated depreciation method. It computes annual depreciation by multiplying the asset’s decreasing book value by a constant percentage rate i.e. two times the straight line depreciation rate.

The formula for double declining balance method of depreciation is -

$a n n u a l d e p r e c i a t i o n = (\cos t - a c c u m u l a t e d d e p r e c i a t i o n) * 2 * (1 / u s e f u l l i f e)$

To determine:

We have to determine the depreciation expense and record the depreciation expense for 2016 and sale of fixtures on October 31, 2016.

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