Moreno Company purchased equipment for $900,000 on January 1, 2017, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 3-year life and a $40,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2019 will be

a.$100,000.

b.$60,000.

c.$108,880.

b.$60,000.

Explanation:

First we have to find the depreciation rate which is shown below:

= One : useful life

= 1 : 3

= 33.33%

Now the rate is double So, 66.66%

In year 1, the original cost is $900,000, so the depreciation is $600,000 after applying the 66.66% depreciation rate

And, in year 2, the $200,000 ($900,000 - $600,000) * 66.66%

And, in year 3 it is ($100,000 - $40,000) = $60,000

The $100,000 is come from

= $900,000 - $600,000 - $200,000

= $100,000