Mohr Company purchases a machine at the beginning of the yea

Mohr Company purchases a machine at the beginning of the year at a cost of $33,000. The machine is depreciated using the double-declining-balance method. The machine\'s useful life is estimated to be 5 years with a $6,000 salvage value. Depreciation expense in year 2 is: Multiple Choice $6,600. $10,800. $13,200. $7,920. $19,800.

Solution

Depreciation rate = 1/5*2 = 40% Depreciation for year 1 = 33000*40%= 13200 Depreciation for year 2 =(33000-13200)*40%= 7920 Option 4 is correct