Tidy Limited purchased a new van on January 1, 2018. The van cost $32,000. It has an estimated life of eight years and the estimated residual value is $3,200. Tidy uses the double-declining-balance method to compute depreciation. What is the adjusted balance in the Accumulated Depreciation account at the end of 2019

The adjusted balance in the Accumulated Depreciation account at the end of 2019 is $14,000.

Explanation:

Given:

Cost of van= $32,000

Estimated residual value= $3,200

Straight-line Depreciation Rate= 1/8

                                                = 0.125

Straight-line Depreciation Rate= 12.5%

Declining Balance Rate = 2 ×12.5%

                                             = 25%

Double declining balance can be calculated with the following formula:

2 x basic depreciation rate x book value

By applying the values,

The adjusted balance in the Accumulated Depreciation account= $14,000.

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