13. A company bought a piece of equipment for $47,200 and expects to use it for eight years. The company then plans to sell it for $5,000. The company has already recorded depreciation of $40,899.57. Using the double-declining-balance method, what is the company's annual depreciation expense for the upcoming year? (Round your answer to the nearest whole dollar amount.) Multiple Choice $1,575. $10,775. $1,300. $17,200

The depreciation expense for the coming year is $1575

Explanation:

The double declining balance method is an accelerated method of charging depreciation expense which charges higher depreciation in the initial years of the asset's useful life and lower depreciation in the later years.

The formula for depreciation expense under the double declining balance method is,

Depreciation expense = 2 * [Cost - Accumulated depreciation] / Estimated useful life of the asset

Depreciation expense = 2 * [ 47200 - 40899.57 ] / 8

Depreciation expense = $1575.1075 rounded off to $1575