Central Supply purchased a new printer for $67,500. The printer is expected to operate for nine...

Central Supply purchased a new printer for $67,500. The printer is expected to operate for nine (9) years, after which it will be sold for salvage value (estimated to be $6,750).

How much is the second year’s depreciation expense if the company uses the double-declining-balance method?

		$15,000
		$11,667
		$18,000
		$13,500
		None of the above

Expert Solution

Answer: $11,667

Explanation

	Double Declining Balance Depreciation

	Beginning book value	x	Double the straight-	=	Depreciation expense
			line rate

First year's depreciation	67,500.00	x	2 x 1/9	=	15,000.00
Second year's depreciation	52,500.00	x	2 x 1/9	=	11,667.00


Explanation:
Double-declining-balance rate =2 ×Straight-line rate (1/Useful life)
Book value at beginning of second year = $67,500 – $15,000 = $52,500

ekkarill92 answered 1 year ago

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