Answer:
The depreciation expense for the second year is $5,600
Explanation:
Under the straight-line method, useful life is 10 years, so the asset's annual depreciation will be 10% of the Depreciable cost.
Depreciable cost = Total asset cost - salvage value = $40,000-$5,000 = $35,000
Under the double-declining-balance method the 10% straight line rate is doubled to 20% - multiplied times the Depreciable cost's book value at the beginning of the year.
In the first year, depreciation expense = 20% x $35,000 = $7,000
At the beginning of the second year, the Depreciable cost's book value is $35,000-$7,000 = $28,000
Depreciation expense in second year = 20% x $28,000 = $5,600
