Hart Company purchased a depreciable asset for $360,000.The estimated residual value is $24,000, and the estimated useful life is 8 years.The double-declining balance method will be used for depreciation.What is the depreciation expense for the second year on this asset?

Question

Quizplus · Accepted Answer

1st year depreciation = ($360,000 - $24,000) x 2/8 = $84,000
2nd year depreciation = ($360,000 - $84,000 - $24,000) x 2/8 = $33,750
Therefore, the depreciation expense for the second year on this asset is $67,500 (double the amount of the 1st-year depreciation expense). The correct answer is option C.

Hart Company Purchased a Depreciable Asset for $360,000