Decorama Corp

question 15

Multiple Choice

Decorama Corp.bought a delivery van for $65,000 with a estimated residual value of $6,000.The van is expected to be used for the next 10 years.The company estimates it will be used to drive a total of 225,000,000 km (30,000 km in the first year,25,000 in the second,third and fourth years and 20,000 in the next six years. What would be the amount of depreciation expense in year 2 using the double-declining-balance method of depreciation?

• A)$6,500.00
• B)$5,900.00
• C)$10,400.00
• D)$6,555.55

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Definitions:

Operation

A series of actions or steps taken to achieve a particular end.

Lack of Experience

The absence or deficiency of practical contact with, and observation of facts or events in a particular field.

Business Operations

Encompasses all the activities and tasks that a business engages in on a day-to-day basis to run smoothly and efficiently, delivering goods or services to customers.

Essentials

Fundamental elements or components necessary for the basic functioning or success of a system, organization, or activity.