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Cash register on January 1 for $5,400. This register has a useful life of 10 years and a salvage value of $400. What would be the depreciation expense for the second-year of its useful life using the double-declining-balance method

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Zviko

Answer:

$800

Explanation:

Double-declining-balance method is also known as reducing balance method.

Depreciation Expense = 2 × SLDP × BVSLDP

Where,

SLDP = 100 ÷ Number of Useful Life

         = 100 ÷ 10

         = 10 %

Year 1

Depreciation Expense = 2×10%×($5,400 - $400)

                                      = $,1000

Year 2

Depreciation Expense = 2×10%×($5,400 - $400- $,1000)

                                      = $800

                       

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