Using the double-declining balance method, what is the depreciation expense in the second year for equipment costing $60,000 with a 5-year useful life and $5,000 salvage value?
Correct Answer
D) $14,400
Double-declining rate = 2 ÷ 5 years = 40%. Year 1: $60,000 × 40% = $24,000. Year 2: ($60,000 - $24,000) × 40% = $36,000 × 40% = $14,400
Why This Is the Correct Answer
Double-declining rate = 2 ÷ 5 years = 40%. Year 1: $60,000 × 40% = $24,000. Year 2: ($60,000 - $24,000) × 40% = $36,000 × 40% = $14,400
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