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Marlow Company purchased a point of sale system on January 1 for $3,400. This system has a useful life of 10 years and a salvage value of $400. What would be the accumulated depreciation at the end of the second year of its useful life using the double-declining-balance method

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Answer:

Accumulated depreciation= $1,080

Explanation:

Giving the following information:

Purchase price= 3,400

Salvage value= 400

Useful life= 10 years

To calculate the depreciation expense under the double-declining balance method, we need to use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Year 1:

Annual depreciation= 2*[(3,400 - 400)/10]= $600

Year 2:

Annual depreciation= 2*[(3,000 - 600)/10]= $480

Accumulated depreciation= $1,080

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