On June 1, 2016, Bagby Co. purchased a new car for $36,000 with a useful life of eight years and a residual value of $4,800. If the company used double-declining-balance depreciation computed to the nearest whole year, depreciation expense for 2017 was

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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 double is 25%. For 2016, depreciation is $36,000 * 25% = $9,000. For 2017, depreciation is ($36,000 - $9,000) * 25% = $6,750.