Schager Company Purchased a Computer System on January 1, 2012

question 107

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.

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