Q1. Compute the Double-Declining-Balance (DDB) Rate for each useful life below.
Straight-Line Rate = (1 / Useful Life)
DDB Rate = Straight-Line Rate x 2 = Double the Straight-line Rate

Q2. Equipment costing $400,000 has an estimated useful life of five years and a residual value of $50,000. Complete the table below for Years 2-5 using the DDB method of depreciation.

Q3. Record the amounts reported on the income statement and the balance sheet over a six-year period.

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SL Rate Double It- DDB Rate a. 5 year life b. 10 year life c. 3 year life 1/5 20% 40% x 2 Depreciation Expense Accumulated Book Value DDB Depreciation Acquisition Cost-Accumulated Dep = 400,000 Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 Total 400,000 -0 | 400,000 x 40% = 160,000 | 160,000 400.000-160,000 = 240,000 Yearl Year 2 Year 3 Year 4 Year 5 Year 6 Income Statement Depreciation Exp Balance Sheet Acquisition Cost Accumulated Dep Book Value S400,000 _ 256,000 144,000