A new truck costing $50,000 with a residual value of $4,000 has an estimated useful life of five years. Using the double declining-balance method, the depreciation expense in year 2 is: A. $20,000 B. $12,000 C. $18,000 D. $7,200 E. None of these

A new truck costing $50,000 with a residual value of $4,000 has an estimated useful life of five years. Using the double declining-balance method, the depreciation expense in year 2 is: A. $20,000 B. $12,000 C. $18,000 D. $7,200 E. None of these

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A new truck costing $50,000 with a residual value of $4,000 has an estimated useful life of five years. Using the double declining-balance method, the depreciation expense in year 2 is:

A.

$20,000

B.

$12,000

C.

$18,000

D.

$7,200

E.

None of these

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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H1.