Final answer:
The depreciation expense for 2025 using the double-declining-balance method would be $38,400.
Step-by-step explanation:
The double-declining-balance method is a depreciation method that allocates a higher depreciation expense in the earlier years of an asset's life. To calculate depreciation using this method, you need to know the initial cost of the asset, the estimated useful life, and the salvage value (residual value). In this case, the equipment was purchased for $96,000, has a five-year life, and a residual value of $3,900.
To calculate the depreciation expense for 2025, you first need to determine the depreciation rate. The formula to calculate the double-declining-balance rate is 2 / useful life. In this case, the rate would be 2 / 5 = 0.4 or 40%. Next, you multiply the net book value (cost minus accumulated depreciation) by the depreciation rate to get the depreciation expense for the year.
For 2025, the net book value would be $96,000 - ($96,000 / 5) = $96,000 - $19,200 = $76,800. Multiplying the net book value by 40% gives you a depreciation expense of $76,800 * 0.4 = $30,720.
Therefore, the correct answer is A. $38,400.