On January 1, a machine with a useful life of five years and a residual value of $80,000 was purchased for $240,000.What is the depreciation expense for year 2 under the double-declining-balance method of depreciation?
A)$57,600.
B)$96,000.
C)$76,800.
D)$46,080.

Question

Quizplus · Accepted Answer

The double-declining-balance method of depreciation results in a higher depreciation expense in the early years of an asset's life. The depreciation rate is twice the straight-line depreciation rate. In this case, the straight-line depreciation rate is 10% ($240,000 - $80,000 / 5 years). The double-declining-balance depreciation rate is 20%. The depreciation expense for year 2 is $240,000 x 20% = $48,000.

On January 1, a Machine with a Useful Life of Five