A depreciable asset that cost $100,000 had an estimated useful life of 5 years and estimated residual value of $10,000. What is the first year for which depreciation would be greater under the straight-line method than under the declining-balance method with an acceleration rate of 200%?
A) The first year.
B) The second year.
C) The third year.
D) The fourth year.

Question

Quizplus · Accepted Answer

Calculation: Straight-line: ($100,000 - $10,000) ÷ 5 = $18,000 per year; declining-balance: $100,000 × 2 × 20% = $40,000 ?rst year; $60,000 × 2 × 20% = $24,000 second year; $36,000 × 2 × 20% = $14,400 third year.

A Depreciable Asset That Cost $100,000 Had an Estimated Useful