If an asset costs $41,000,has a residual value of $3,000,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)debit to Depreciation Expense,9,430;credit to Cash,9,430.
B)debit to Depreciation Expense,9,840;credit to Accumulated Depreciation,9,840
C)debit to Depreciation Expense,10,250;credit to Accumulated Depreciation,10,250
D)debit to Accumulated Depreciation,10,660;credit to Depreciation Expense,10,660

Question

Quizplus · Accepted Answer

The double-declining-balance method of depreciation involves doubling the straight-line rate of depreciation. For an asset with a useful life of 5 years, the straight-line depreciation rate is 20% (100% / 5 years). Doubling this gives a depreciation rate of 40% per year. In the first year, the depreciation expense is 40% of $41,000, which is $16,400. This leaves a book value of $24,600 ($41,000 - $16,400) at the end of the first year. In the second year, the depreciation expense is 40% of $24,600, which is $9,840. Therefore, the correct entry is a debit to Depreciation Expense and a credit to Accumulated Depreciation for $9,840.

If an Asset Costs $41,000,has a Residual Value of $3,000,and