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Eckman Company purchased equipment for $120,000 on January 1, 2014, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 5-year life and a $6,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2016 will be

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Answer:

$17,280

Step-by-step explanation:

The double-declining-balance deprecation expense = Depreciation factor x cost of asset

Deprecation factor = 2 x (1/useful life)

2 x (1/5) = 0.4

Depreciation expense in 2014 = 0.4 × $120,000 = $48,000

Book value in 2014 = $120,000 - $48,000 = $72,000

Depreciation expense in 2015 = 0.4 x $72,000 = $28,800

Book value in 2015 = $72,000 - $28,800 = $43,200

Depreciation expense in 2016 = 0.4 x $43,200 = $17,280

I hope my answer helps you

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