Given that the cost of the truck costs $9,200 with a residual value of $1,000. The depreciation is given by cost less residual value.
Thus, the depreciation value for the cost is $9,200 - $1,000 = $8,200
Given that the useful life of the truck is 4 years, thus the depreciation rate for the truck using straight line method is 25%.
Given that the declining balance rate is twice the straight line rate, thus the declining balance rate is 50%.
The 1st year depreciation value is given by: 0.5(9,200) = $4,600
The 2nd year depreciation value is given by: 0.5(4,600) = $2,300
Thus, the depreciation expence for year 2 is given by $2,300.
