On the first day of its fiscal year, Scooter Co. purchased a computer system for a total cost of $50,000. The computer system is expected to have a useful life of 5 years with a residual value of $5,000. If the company uses the double-declining-balance method, its depreciation expense for the computer system in the first year will be:

$20000

Explanation:

Given: Total cost of computer system= $50000.

           Residual value= $5000.

           Useful life= 5 years.

Now, calculating depreciation expense as per double-declining balance method.

⇒

⇒

∴

Hence, $20000 is the depreciation expense for first year as per double-declining balance method.

disadvantages of leasing a vehicle: no vehicle equity and mileage limitations

disadvantages of purchasing a vehicle: large down payment and vehicle depreciation

#plato4lyfe