Ironworks Industries purchased a piece of equipment for $65,000 with an estimated salvage value of $15,000 on January 1.Its estimated life is 5 years.To the nearest dollar,what is the equipment's depreciation using double-declining-balance for year 2?

Question

Quizplus · Accepted Answer

To calculate depreciation using double-declining-balance, we first need to find the depreciation rate, which is 2 divided by the estimated life (in this case, 5 years). So the depreciation rate is 40% (2/5).

For year 1, the depreciation expense would be $26,000 (40% of $65,000).

For year 2, we need to start with the remaining book value from the end of year 1, which is $39,000 ($65,000 - $26,000). Applying the depreciation rate of 40%, we get a depreciation expense of $15,600 ($39,000 x 40%).

Therefore, the correct answer is choice C) $15,600.

Ironworks Industries Purchased a Piece of Equipment for $65,000 with an Estimated