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20 May, 09:53

A company purchased a computer system at a cost of $24,000. The estimated useful life is 6 years, and the estimated residual value is $9,000. Assuming the company uses the double-declining-balance method, what is the depreciation expense for the second year? (Do not round your intermediate calculations. Round your answer to the nearest whole dollar amount.)

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  1. 20 May, 10:27
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    Year 2 = $3,333.33

    Explanation:

    Giving the following information:

    A company purchased a computer system for $24,000. The estimated useful life is 6 years, and the estimated residual value is $9,000.

    To calculate the depreciation expense for the second year, we need to use the following formula for year 1 and 2:

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

    Year 1 = 2*[ (24,000 - 9,000) / 6] = 5,000

    Year 2 = 2*[ (15,000 - 5,000) / 6] = 3,333.33
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