Answer:
$20,000
Explanation:
For computing the depreciation expense, first we have to determine the first and second year depreciation which are shown below:
First we have to find the depreciation rate which is shown below:
= One ÷ useful life
= 1 ÷ 4
= 25%
Now the rate is double So, 50%
In year 1, the original cost is $160,000, so the depreciation is $80,000 after applying the 50% depreciation rate
And, in year 2, the $80,000 × 50% = $40,000
The 80,000 is come from = $160,000 - $80,000
And, in year 3, the $40,000 × 50% = $20,000
The 40,000 is come from = $80,000 - $40,000
