Problem:
Howe Chemicals Company acquires a delivery truck at a cost of $40,300 on January 1, 2014. The truck is expected to have a salvage value of $3,100 at the end of its 5-year useful life.
Required:
Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method.
Note: Provide support for your rationale.