QUESTION 7

1. Use the following information to answer the next two questions: (Question 1 of 2)

   Higgins Company purchased specialized equipment on July 1, 2019, that cost $300,000, has a residual value of $40,000, and a useful life of four years.

   The amount of depreciation expense for 2020, under the double declining balance method is:

   	A.	$112,500.
   	B.	None of the above
   	C.	$97,500.
   	D.	$75,000.
   	E.	$125,000.

2 points

QUESTION 7

B

1. Use the following information to answer the next two questions: (Question 2 of 2)

   Higgins Company purchased specialized equipment on July 1, 2019, that cost $300,000, has a residual value of $40,000, and a useful life of four years.

   The net book value of the equipment at the end of 2021 (after recording depreciation for 2021) using the straight-line method would be

   	A.	$ 97,500.
   	B.	$202,500.
   	C.	None of the above.
   	D.	$137,500.
   	E.	$162,500.