Question

Using the double declining depreciation method for an asset with a useful life of 7 years. What is the depreciation expense for year 2 on an asset costing $110000? Note: Round the answer to 0 decimal places (i.e. nearest dollar).

Answer 1

The depreciation expense for year 2 is $13,469

Step-by-step explanation:

Computing the depreciation expense for year 1 is:

Depreciation expense = Asset cost / Number of useful life

= $110,000 / 7

= $15,714.28

Computing the depreciation expense for year 2 is as:

Asset cost for year 2 = Asset cost - Depreciation expense for year 1

$110,000 - $15,714.28

= $94,285.72

So, depreciation expense would be:

Depreciation expense = Asset cost for year 2 / Number of useful life

= $94,285.72 / 7

= $13,469