Accounting 217 Q26 review


What is the depreciation expense for the first year under the double diminishing balance method?

The answer says (800,000-100,000)*0.40

My question is: why do they minus the residual? In double diminishing, shouldn’t you just use the carrying amount at the beginning of the year?


You are correct, the solution should not have included the residual value.

Therefore should be:

($800,000) x (1/5 years) x 200% = $320,000

Thanks for catching that and I hope my response made sense!