Nadler Inc. purchased equipment for $48,000, and estimated that the equipment will have a $4,000 residual value at the end of its 8-year useful life. Using the double-declining-balance method, the depreciation expense for the third year would be

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The double-declining-balance method involves doubling the straight-line depreciation rate. The straight-line rate is 1/8 = 12.5%, so the double rate is 25%. Year 1 depreciation: $48,000 * 25% = $12,000. Year 2 depreciation: ($48,000 - $12,000) * 25% = $9,000. Year 3 depreciation: ($48,000 - $12,000 - $9,000) * 25% = $6,750.