If an asset costs $70,000,has a residual value of $6,000,and has a useful life of five years,the entry to record depreciation in the second year,using the double-declining-balance method,is:
A) Depreciation Expense - Asset 16,100
Cash 16,100
B) Depreciation Expense - Asset 16,800
Accumulated Depreciation - Asset 16,800
C) Depreciation Expense - Asset 17,500
Accumulated Depreciation - Asset 17,500
D) Accumulated Depreciation - Asset 18,200
Depreciation Expense - Asset 18,200

Question

Quizplus · Accepted Answer

The double-declining-balance method calculates depreciation by doubling the straight-line rate. In the first year, the depreciation is 2*(1/5)*$70,000 = $28,000. In the second year, the book value is $70,000 - $28,000 = $42,000, so the depreciation is 2*(1/5)*$42,000 = $16,800.

If an Asset Costs $70,000,has a Residual Value of $6,000,and