Fields Company purchased equipment on January 1 for 180,000 This system has a useful life of 8 years and a salvage value of 20,000 The company estimates that the equipment will produce 40,000 units over its 8-year useful life Actual units produced are: Year 1 - 4,000 units Year 2-6 ,000 units; Year 3 - 8,000 units Year 4-5,000 units; Year 5 - 4 ,000 units; Year 6 - 5,000 units;Year 7 -7 ,000 units; Year 8 - 3 ,000 units. What would be the depreciation expense for the second year of its useful life using the double-declining -balance method? 16,000 24,000 45,000 20,000 33,750

To calculate the depreciation expense for the second year using the double-declining-balance (DDB) method, follow these steps:<br /><br />1. **Determine the straight-line depreciation rate:**<br /> \[<br /> \text{Straight-line rate} = \frac{1}{\text{useful life}} = \frac{1}{8} = 0.125 \text{ or } 12.5\%<br /> \]<br /><br />2. **Double the straight-line rate for DDB:**<br /> \[<br /> \text{DDB rate} = 2 \times 0.125 = 0.25 \text{ or } 25\%<br /> \]<br /><br />3. **Calculate the first year's depreciation:**<br /> - Initial book value = \( \$180,000 \)<br /> - First-year depreciation = \( 0.25 \times 180,000 = \$45,000 \)<br /><br />4. **Calculate the book value at the end of the first year:**<br /> \[<br /> \text{Book value after Year 1} = 180,000 - 45,000 = \$135,000<br /> \]<br /><br />5. **Calculate the second year's depreciation:**<br /> - Second-year depreciation = \( 0.25 \times 135,000 = \$33,750 \)<br /><br />Therefore, the depreciation expense for the second year using the double-declining-balance method is \(\$33,750\).