Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be:
A) $36,000
B) $42,000
C) $54,000
D) $16,000
E) $90,000
C) $54,000
Accordingly, the asset's book value at the end of Year 2 would be $54,000.
BOY BV = Beginning of Year Book Value
DB Rate = Declining Balance Rate of Depreciation (1/5 * 2)
EOY BV = End of Year Book Value
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