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Naddika [18.5K]
3 years ago
13

Schager Company purchased a computer system at a cost of $40,000. The estimated useful life is 10 years, and the estimated resid

ual value is $5,000. Assuming the company will use the double-declining-balance method, what is the depreciation expense for the second year
Business
1 answer:
katrin [286]3 years ago
8 0

Answer:

$6400

Explanation:

The double-declining method uses twice the percentage of the straight-line method.

For Schager Company, the straight-line method rate will be  1/10 x 100 = 10%

The double-declining rate will be 20%

The first-year depreciation will be 20% x $40,000

=0.2 x $40,000

= $8,000

The second-year depreciation will be, 20% x (40,000- 8,000)

=20/100 x 32,00

=$6400

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