On January 1, 2013 Midwest Co. purchased a truck that cost $38,000. The truck had an expected useful life of 10 years and a $4,000 salvage value. The amount of depreciation expense recognized in 2014 assuming that Midwest uses the double declining-balance method is:
A)$5,440.
B)$6,080.
C)$3,800.
D)$7,600.

Question

Quizplus · Accepted Answer

$38,000 x (2 x 10%) = $7,600 depreciation expense in 2013. ($38,000 - $7,600) x (2 x 10%) = $6,080 depreciation expense in 2014.