The cost of an asset is $1,110,000,and its residual value is $110,000.Estimated useful life of the asset is eight years.Calculate depreciation for the second year using the double-declining-balance method of depreciation.(Do not round any intermediate calculations,and round your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

- Double-declining-balance rate = (100% / Estimated useful life) x 2
= (100% / 8 years) x 2 = 25%
- Depreciation Expense for Year 1 = Cost x Double-declining-balance rate
= $1,110,000 x 25% = $277,500
- Book Value at the end of Year 1 = Cost - Depreciation Expense for Year 1
= $1,110,000 - $277,500 = $832,500
- Depreciation Expense for Year 2 = Book Value at the beginning of Year 2 x Double-declining-balance rate
= $832,500 x 25% = $208,125
Therefore, the answer is D ($208,125).

The Cost of an Asset Is $1,110,000,and Its Residual Value