An asset costing $50,000.00 with a residual value of $5,000.00 has an estimated useful life of 5 years. using the declining-balance method at twice the straight-line rate the depreciation for the second year is
$20,000.00.
$10,800.00.
$12,000.00.
$18,000.00.

$18,000

Explanation:

1. Figure out the straight-line declining balance by dividing 1 by the number of years of expected life (5). 1/5= 0.20 or 20%.

2. for double-declining-balance, multiply 0.20 * 2 = 0.40

3. Find the depreciation for the first year. $50,000 * 0.40 = $20,000, then subtract $20,000 from $50,000 = $30,000

4. Do the same process for the following years. $30,000 *0.40 = S12,000, $30,000 - $12,000 = $18,000

answer; normative economics;