# Double Declining Balance - Schweser 16B Example

On Pg 43 in section 16.B, there is a question about the effects of depreciation methods on net income.

I was able to do most of the question without any issues. However, I’m stuck on the double declining balance method for year 3 -5. Why does the depreciation expense drop from \$132k to \$49.3k in year 3 and stick with that for the next two years?

I was under the impression that depreciation in year 3 would be (2 x BV year 2) / Number of years. Wouldn’t this be (2 x 198k) / 5 = \$79.2k depreciation in year 3? Is this a mistake in Schweser or am I totally missing something??

-Mark

1. did you know you could calculate this on your calculator too?

2. provide details of the question - so you can be helped.

Sorry, I probably should have added initially. I forgot that Charterholders would also be around the forums and helping us out.

“Sackkett Laboratories purchases chemical processing machinery for \$550,000. The equipment has an estimated useful life of five years and an estimated salvage value of \$50,000.”

My question is regarding the depreciation over the five years for the double declining balance methodolgy. The answers I get are:

\$220k, \$132k, \$79.2k, \$47.5k, \$21.3k, but the book shows \$220k, \$132k, \$49.3k, \$49.3k, \$49.3k.