On January 1,Year 1 Missouri Co.purchased a truck that cost $57,000.The truck had an expected useful life of 10 years and a $6,000 salvage value.Missouri uses the double declining-balance method.What is the amount of depreciation expense recognized in Year 2?

Question

Quizplus · Accepted Answer

Double-declining-balance rate = (1 ÷ 10)× 2 = 20%
Depreciation expense = (Cost - Accumulated depreciation)× Double-declining-balance rate
Year 1: $57,000 × 20% = $11,400
Year 2: ($57,000 - $11,400)× 20% = $9,120