Question

Depreciation Methods A machine costing $251,800 was purchased May 1. The machine should be obsolete after...

Depreciation Methods

A machine costing $251,800 was purchased May 1. The machine should be obsolete after three years and, therefore, no longer useful to the company. The estimated salvage value is $3,400. Calculate the depreciation expense for each year of its expected useful life using each of the following depreciation methods: (a) straight-line, (b) double-declining balance. For double-declining balance, do not round until your final answer. Round your final answers to the nearest dollar.

a. Straight-line:
Year 1: $Answer
Year 2: Answer
Year 3: Answer
Year 4: Answer
b. Double-declining balance:
Year 1: $Answer
Year 2: Answer
Year 3: Answer
Year 4: Answer

Homework Answers

Answer #1
For year 1 the depreciation will be charged for 8 months only
for year 4 the depreciation charged will be for 4 months remaining
straight line depreciation
(251,800 - 3,400)/3
82800
a. Straight-line
year 1 55200
year 2 82,800
year 3 82,800
year 4 27600
b. Double declining
rate = 1/3*2
0.666667
or 66.67%
year beginning dep book
bal value
1 251800 111911 139889
2 139889 93259 46630
3 46630 31087 15543
4 15543 12143 3400
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