Answer :
Answer:
$7,000
Explanation:
Data provided in the question:
Cost of the equipment = $28,000
Residual value = $4,000
Useful life = 4 years
Now,
Using the double-declining-balance method
Rate of annual depreciation = 2 × [1 ÷ ( useful life ) ]
= 2 × [1 ÷ 4 ]
= 0.5 or 50%
Thus,
Book value at the end of 2018 i.e 31 December 2018
= Book value on January 1, 2018 - Depreciation
= $28,000 - ( 0.5 × $28,000 )
= $28,000 - $14,000
= $14,000
Hence,
Book value on 31 December 2019
= Book value on January 1, 2019 - Depreciation
= $14,000 - ( 0.5 × $14,000 )
= $14,000 - $7,000
= $7,000
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