ACTIVITY 68 Purpose: 01 a. b. C. Q2 Q3 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 5 year life 10 year life 3 year life DDB Acquisition Year 1 Year 2 Year 3 Year 4 Year 5 PPE: DOUBLE-DECLINING-BALANCE DEPRECIATION Compute depreciation using the double-declining-balance method. Understand what amounts are reported for depreciation on the financial statements. Total Depreciation Expense 400,000 * 40% = Income Statement 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. Beginning Book Value x DDB Rate = DDB Depreciation Expense Depreciation Expense Balance Sheet SL Rate 1/5= 20% Acquisition Cost Accumulated Dep Specific Accounts Book Value 160,000 $ LA $ $ Accumulated Depreciation Record the amounts reported on the income statement and the balance sheet over a six-year period. Year 1 160,000 $ Year 2 Double It = 256,000 $144,000 SA Page 193 x 2 $ $400,000 $ LA x 2 X 2 $ Year 3 Book Value = Acquisition Cost - Accumulated Dep 400,000 0 400,000 DDB Rate Year 4 $ $ - 160,000 40% Year 5 $ A $ 400,000 240,000 Year 6 SA $ LA $ Chapter 6

ACTIVITY 68 PPE: DOUBLE-DECLINING-BALANCE DEPRECIATION Purpose: - Compute depreciation using the double-declining-balance method. - Understand what amounts are reported for depreciation on the financial statements. a1 Compute the Double-Declining Balance (DDB) Rate for each useful life below: Straight-Line Rate =(1/ Useful Life ) DDB Rate = Straight-Line Rate 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 25 using the DDS method of depreciation. Beginning Book Value DDS Rate = DDB Depreclation Expense Q3 Record the amounts reported on the incoene staiement and the balance sheet over a six-year period. Specific Accounts Page 193 Chapter 6