On september 30, 2021, bricker enterprises purchased a machine for $200,000. the estimated service life is 10 years with a $20,000 residual value. bricker records partial-year depreciation based on the number of months in service.

depreciation for 2022, using the double-declining-balance method, would be:

multiple choice

$32,000.
$34,000.
$38,000.
$40,000.

$38,000

Explanation:

Double-declining-balance method used its ratio by computing depreciation expense. By multiplying it against original cost. To get ratio we simply divide 100% over the life of an asset times 2.

100% / 10 years x 2 = 20%

First, we will compute the 2021 depreciation for us to know our base amount on year 2022.

$200,000 x 20% = $40,000 x3/12 = $10,000

we prorate the annual depreciation expense because part of it is applicable to 2021 and 2022.

For year 2022, we have two ways to compute.

First:

$200,000 x 20% = $40,000 x 9/12 = $30,000 (the portion of the first year’s depreciation that’s for January 1, 2022 to September 30,2022), plus

$200,000 - $40,000 = $160,000 (year 2 net book value)

$160,000 x 20% = 32,000 x 3/12 = $8,000 (portion of second year’s depreciation that for October 01, 2022 to December 31, 2022)

Or second, an alternative way to compute,

2021

$200,000 x 20% = $40,000 x 3/12=$10,000

2022

$200,000 - $10,000 = $190,000 (Net book value)

$190,000 x 20% = $38,000

*Residual value is ignored in computing depreciation expense under double-declining-balance method.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

answer; complain or request hazard correction from your employer;