On the first day of its fiscal year, Spearhead Company purchased a new computer systemfor a total cost of $50,000. The computer system is expected to have a life of 5 years witha residual value of $5,000. If the company uses the double-declining-balance method, itsdepreciation expense for this computer system in the first year will bea. $9,000.b. $10,000.c. $18,000.d. $20,000.

Question

On the first day of its fiscal year, Spearhead Company purchased a new computer system
for a total cost of $50,000. The computer system is expected to have a life of 5 years with
a residual value of $5,000. If the company uses the double-declining-balance method, its
depreciation expense for this computer system in the first year will be
a. $9,000.
b. $10,000.
c. $18,000.
d. $20,000.

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