Question

Dixon company purchased a depreciable asset for $32,000. The estimated salvage value is $4,000, and the estimated useful life is 4 years. The double-declining balance method will be used for depreciation. What is the depreciation expense for the second year on this asset

Answer 1

Answer:

The double-declining balance rate is 100%/4 x 2 = 50%. The first year's depreciation is (50% of book value of asset first of year - Year 1, $32,000) $16,000. The second year's depreciation is [50% of book value of asset first of year - Year 2, ($32,000 - $16,000)] or $8,000

Explanation:

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