Best Model Company Reported $61,000 in Depreciation Expense for the Current

question 192

Multiple Choice

Best Model Company reported $61,000 in depreciation expense for the current year using the double-declining-balance method. The company estimates that it saved net cash of $12,000 in income taxes by using the double-declining-balance instead of the straight-line method. The company has a 30% tax rate. What would depreciation expense have been using the straight-line method?

• A) $43,857
• B) $40,000
• C) $21,000
• D) $7,200

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Definitions:

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