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21 September, 19:44

The cost of an asset is $1,110,000, and its residual value is $110,000. Estimated useful life of the asset is eight years. Calculate depreciation for the second year using the double-declining-balance method of depreciation. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)

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  1. 21 September, 20:37
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    Year 2 = $187,500

    Explanation:

    Giving the following information:

    The cost of an asset is $1,110,000, and its residual value is $110,000. The estimated useful life of the asset is eight years.

    Annual depreciation = 2*[ (book value) / estimated life (years) ]

    Year 1 = (1,110,000 - 110,000) / 8*2 = 250,000

    Year 2 = 750,000/8*2 = $187,500
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