Given:
Cost = 24,000
life = 5 years
salvage value = 4,000
Double declining balance stops when the book value of the asset is equal to its salvage value.
Double declining balance formula: 2 * straight line dep. rate * book value beginning of the year.
straight line dep rate = (24,000 - 4,000) ÷ 5 yrs = 4,000
⇒ 4,000 / 20,000 = 0.2 or 20%
year Net book value, beg DDB dep. ext net book value, end
2011 24,000 9,600 14,400
2012 14,400 5,760 8,640
2013 8,640 3,456 5,184
The depreciation expense recognized in 20x3 is 3,456.
