What Would Be the Depreciation Expense Using Double Declining-Balance to Compute

question 56

Multiple Choice

What would be the depreciation expense using double declining-balance to compute the expense for year 2 of a machine costing $30,000, when residual value is $2,000, and useful life is 3 years? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

• A) $4,444
• B) $72,000
• C) $6,667
• D) $2,000

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Definitions:

Smoothing Constant

A parameter in exponential smoothing models that controls the degree to which more recent observations are weighted more heavily than older observations.

Exponential Smoothing

A time series forecasting method for univariate data that applies weighting factors which decrease exponentially over time, emphasizing more recent observations.

Liquor Sales

The commercial activity of selling alcoholic beverages, including spirits, wines, and beers.

Smoothing Constant

A parameter used in exponential smoothing techniques that determines the weight given to the most recent observation in forecasting.