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Sagot :
the depreciation expense for the second year using the double-declining-balance method of depreciation will be c.$2,640
(100% ÷ 5 years) X 2 = 40%
Depreciation for year 1 = $11,000 X 40% = $4,400.
Depreciation for year 2 = ($11,000 - $4,400) X 40% = $2,640.
A method of accounting known as the double declining balance (DDB) depreciation method entails depreciating some assets at a rate that is twice that of straight-line depreciation. As a result, depreciation increases during the first year of ownership and decreases thereafter.
When you buy assets that depreciate more rapidly in the first few years, the optimal scenario for using double declining balance depreciation is that situation. The asset that loses value the most in the first few years of ownership is a car.
Learn more about the double-declining-balance method here:
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