Marlow Company purchased a point of sale system on January 1 for $5,600. This sy

Question

Marlow Company purchased a point of sale system on January 1 for $5,600. This system has a useful life of 4 years and a salvage value of $500. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?

$1,275.

$1,336.

$2,550.

$2,800.

$1,400.

Marlow Company purchased a point of sale system on January 1 for $5,600. This system has a useful life of 4 years and a salvage value of $500. What would be the depreciation expense for the second year of its useful life using the double-declining-balance method?

Explanation / Answer

$1,400.

Depreciation Schedule

Cost: $5,600.00, Salvage: $400.00, Life: 4 years, Factor: 2
Convention: Full-Month, First Year: 12 months

Depreciation Schedule Year
Book Value
Year Start Depreciation
Percent Depreciation
Expense Accumulated
Depreciation Book Value
Year End 1 $5,600 50.00% $2,800 $2,800 $2,800 2 $2,800 50.00% $1,400 $4,200 $1,400 3 $1,400 50.00% $700 $4,900 $700 4 $700 42.86% $300 $5,200 $400

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