On January 1, Year 1, Missouri Co. purchased a truck that cost $32,000. The truck had an expected useful life of 10 years and a $3,000 salvage value. Missouri uses the double declining-balance method. What is the amount of depreciation expense recognized in Year 2?

Annual depreciation= $4,640

Explanation:

Giving the following information:

Purchase price= $32,000

Useful life= 10 years

Salvage value= $3,000

To calculate the depreciation expense, we need to use the following formula each year:

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

Year 1:

Annual depreciation= 2*[(32,000 - 3,000) / 10]

Annual depreciation=  $5,800

Year 2:

Annual depreciation= 2*[(29,000 - 5,800)/10]

Annual depreciation= $4,640

d) social security number

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