IFA56 – Double-Declining-Balance Depreciation (Partial Year) – Intermediate Accounting

Download the Workbook: http://www.tonybell.com Unlock 100+ Members Accounting Tutorials: https://www.youtube.com/channel/UCNFClg6mzfZ5ixpuH9c7f1A/join In This Video: We continue with Part C of Problem 11-1A, tackling the Double-Declining-Balance (DDB) depreciation method. Using the Martinez Construction concrete mixer, we calculate the DDB rate by doubling the straight-line percentage to reach 40%. We then calculate the depreciation expense year-by-year, starting with the full $95,000 capitalized cost because this method initially ignores residual value. Crucially, we walk step-by-step through prorating the first year for the April 1 purchase date (9 months), demonstrating exactly how this impacts the opening book value for the second year. Finally, we carefully monitor the declining book value in the later years to ensure we do not depreciate the asset below its $11,000 residual value floor. Module Overview (IFA53–IFA61): This module explores the systematic allocation of asset costs and the rules for write-downs. We will examine the major depreciation methods (Straight-Line, Declining Balance, and Units-of-Production), handle partial-year depreciation, and navigate changes in accounting estimates. We will also dive into the specific calculations required for depleting natural resources and walk step-by-step through the strict testing rules and journal entries for asset impairment.