The price of machining equipment purchased by Brass Industries was $45,800. It cost $3,460 for initial setup. The salvage value at the end of 5 years is $6,700. Using the double-declining-balance depreciation method, calculate the annual depreciation of year 2. (Round the declining-balance rate to 4 decimal places, and all dollar amounts to the nearest cent)

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The double-declining-balance depreciation rate is calculated as 2/n, where n is the useful life of the asset. Here, n = 5 years, so the rate is 2/5 = 0.4 or 40%. The initial book value is the purchase price plus setup cost, $45,800 + $3,460 = $49,260. For the first year, depreciation is 40% of $49,260, which is $19,704. The book value at the end of year 1 is $49,260 - $19,704 = $29,556. For year 2, depreciation is 40% of $29,556, which is $11,822.40.

The Price of Machining Equipment Purchased by Brass Industries Was