Question

PLEASE SHOW ALL WORK AND EXPLAIN PLEASE

A machine that cost $96,000 on January 1, 2015 was depreciated by Ava Company using the double declining method. The machine had a $8,600 residual value and a useful life of 5 Years. On January 1. 2017, the company switched to the straight line method. What is the book value of the machine as of January 1, 2017?________

Answer 1

Ans:

Rate of depreciation under Double declining method

1/useful life*2*100=40%

Depreciation expense=Book value*Rate of Depreciation

year	Rate	Beginning book value $	Depreciation expense $	Accumulated depreciation $	Net book value $
2015	40%	96,000	38,400	38,400	57,600
2016	40%	57,600	23,040	61,440	34,560
2017	34,560

so The book value of the machine as of January 1, 2017 34,560$