Question

On January 2, 2016, Fischer Company purchases a machine that manufactures a part for one of its key products. The machine cost $396,900 and is estimated to have a useful life of six years, with an expected salvage value of $33,750. Compute depreciation expense for 2016 and 2017 for the Double-declining balance.

Answer 1

depereciation expense in double declining balance method

annual depreciation = book value * 100 % / life * 2

percentage = 100 % / useful life * 2

depreciation rate = 100 % / 6 * 2

= 33.333 %

year	beginning of period book value	depreciation rate	depreciation expenses	accumulated depreciation	book value
2016	396900	33..3333%	132300	132300	264600
2017	264600	33.3333 %	88200	88200	176400

depreciation expense of 2016 = 132300

depreciation expense of 2017 = 88200