On January 2, 2019, Kornis Corporation acquired equipment for $ 1 comma 000 comma 000. The estimated life of the equipment is 5 years or 50 comma 000 hours. The estimated residual value is $ 40 comma 000. What is the balance in Accumulated Depreciation on December 31, 2019, if Kornis Corporation uses the double-declining-balance method of depreciation? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.) A) $100,000. B) $200,000. C) $184,000. D) $92,000.

Depreciation by December 31, 2019=$400,000

Explanation:

The expression for the accumulated depreciation is as follows;

accumulated depreciation=Acquisition cost-residual value

where;

acquisition cost=$1,000,000

residual value=$40,000

replacing;

depreciable cost=1,000,000-40,000=$960,000

depreciable cost=$960,000

The annual depreciation can be expressed as;

annual depreciation=depreciable cost/estimated life

where;

depreciable cost=$960,000

estimated life=5 years

replacing;

annual depreciation=960,000/5=192,000

annual depreciation=$192,000

depreciation rate=annual depreciation/depreciable cost*100

depreciable rate = (192,000/960,000) * 100=20%

Since it is a double-declining depreciation rate we multiple the depreciable rate by 2;

(20%*2) = 40%

Depreciation by December=carrying value*rate

Depreciation by December 31, 2019=1,000,000*40%=$400,000