Bagby Co. purchased a new car for $36,000 on June 1, 2014, 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 2015 was

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Double-declining-balance depreciation = (2 * Straight-line depreciation rate) * Book value at the beginning of the yearStraight-line depreciation rate = (Cost - Residual value) / Useful life= (36,000 - 4,800) / 8= 4,000 / 8= 500Double-declining-balance depreciation rate = 2 * 500= 1,000Book value at the beginning of 2015 = Cost - Accumulated depreciation= 36,000 - (36,000 * 1,000 * 1 / 8)= 36,000 - 4,500= 31,500Depreciation expense for 2015 = Double-declining-balance depreciation rate * Book value at the beginning of the year= 1,000 * 31,500= 31,500,000= $31,500

Bagby Co Purchased a New Car for $36,000 on June 1