Schager Company Purchased a Computer System on January 1,2012,at a Cost

question 36

Multiple Choice

Schager Company purchased a computer system on January 1,2012,at a cost of $40,000.The estimated useful life is 10 years,and the estimated residual value is $5,000.Assuming the company will use the double-declining-balance method,what is the depreciation expense for the second year?

• A)$8,000.
• B)$7,000.
• C)$5,600.
• D)$6,400.($40,000 - 8,000)x 20% = $6,400 depreciation in the second year.

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