If a company uses the declining balance method and has a depreciation rate of 30%, what is the depreciation expense for the first year on an asset costing $5,000?
Practice Questions
1 question
Q1
If a company uses the declining balance method and has a depreciation rate of 30%, what is the depreciation expense for the first year on an asset costing $5,000?
$1,500
$1,000
$1,200
$1,500
Depreciation expense = Cost x Depreciation Rate = $5,000 x 30% = $1,500.
Questions & Step-by-step Solutions
1 item
Q
Q: If a company uses the declining balance method and has a depreciation rate of 30%, what is the depreciation expense for the first year on an asset costing $5,000?
Solution: Depreciation expense = Cost x Depreciation Rate = $5,000 x 30% = $1,500.
Steps: 6
Step 1: Identify the cost of the asset. In this case, the cost is $5,000.
Step 2: Identify the depreciation rate. Here, the depreciation rate is 30%.
Step 3: Convert the depreciation rate from a percentage to a decimal. 30% as a decimal is 0.30.
Step 4: Multiply the cost of the asset by the depreciation rate. So, calculate $5,000 x 0.30.
Step 5: Perform the multiplication. $5,000 x 0.30 equals $1,500.
Step 6: The result, $1,500, is the depreciation expense for the first year.
