Answer:
Book value 2022= $55,176
Explanation:
Giving the following information:
Kansas Enterprises purchased equipment for $81,000 on January 1, 2021. The equipment is expected to have a five-year life, with a residual value of $8,400 at the end of five years.
We need to calculate the accumulated depreciation for two years. Then, we deduct it from the book value on January 1, 2021.
Using the double-declining balance method of depreciation, we need to use the following formula for each year:
Annual depreciation= 2*[(book value)/estimated life (years)]
2021= [(81,000 - 8,400)/5]*2= 29,040
2022= [(72,600 - 29,040)/5]*2= 17,424
Book value 2022= 72,600 - 17,424= $55,176
