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Marianna [84]
3 years ago
13

A company purchased a computer system at a cost of $34,000. The estimated useful life is 8 years, and the estimated residual val

ue is $9,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year
Business
1 answer:
Iteru [2.4K]3 years ago
3 0

Answer:

Year 2= $4,687.5

Explanation:

Giving the following information:

Purchase price= $34,000

Useful life= 8 years

Salvage value= $9,000

<u>To calculate the depreciation expense under the double-declining-balance, we need to use the following formula:</u>

<u></u>

Annual depreciation= 2*[(book value)/estimated life (years)]

Year 1= [(34,000 - 9,000)/8]*2= $6,250

Year 2= [(25,000 - 6,250)/8]*2= $4,687.5

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