Question

Colvin Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000....

Colvin Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset’s depreciation expense in Year 2 will be:

A) 90000

B) 54000

C) 42000

D) 16000

E) 36000

Homework Answers

Answer #1
Cost of machinery $   100,000
Life of machinery 5 Years
Number of months used in Year 1 (Oct to Dec) 3 Months
Depreciation for year 1 ($100,000/5*2*3/12) $     10,000
Book value at year 2 beginning ($100,000-$10,000) $     90,000
Depreciation for year 2 ($90,000/5*2) $     36,000

Answer is E) 36,000

You can reach me over comment box if you have any doubts. Please rate this answer

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000....
Beckman Enterprises purchased a depreciable asset on October 1, Year 1 at a cost of $100,000. The asset is expected to have a salvage value of $20,000 at the end of its five-year useful life. If the asset is depreciated on the double-declining-balance method, the asset's book value on December 31, Year 2 will be: Select one: a. $54,000 b. $16,000 c. $42,000 d. $36,000
Peavey Enterprises purchased a depreciable asset for $24,000 on April 1, Year 1. The asset will...
Peavey Enterprises purchased a depreciable asset for $24,000 on April 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,400, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? $4,500 $5,400 $18,000 $14,850 $21,600
On October 1, 2014, Hess Company places a new asset into service. The cost of the...
On October 1, 2014, Hess Company places a new asset into service. The cost of the asset is $80,000 with an estimated 5-year life and $20,000 salvage value at the end of its useful life. What is the book value of the plant asset on the December 31, 2014, balance sheet assuming that Hess Company uses the double-declining-balance method of depreciation?
A depreciable asset is purchased for $50,000. The expected salvage value is zero at the end...
A depreciable asset is purchased for $50,000. The expected salvage value is zero at the end of it’s 8 year useful life. Compute the depreciation schedule by using double declining balance (DDB) to switch over straight line depreciation. Also, determine the book value of the asset after 6 years.
An asset is purchased on January 1 at a cost of $25,000. It is expected to...
An asset is purchased on January 1 at a cost of $25,000. It is expected to be used for four years and have a salvage value of $1,000. Calculate the depreciation expense for each year of the asset's useful life under each of the following methods: (Show Work) Straight-line method Double-declining-balance method Sum-of-the-years-digits' method
Calculate the deferred tax asset at 31 December 20X1 based on the following: $10,000 asset acquired...
Calculate the deferred tax asset at 31 December 20X1 based on the following: $10,000 asset acquired 01 January 20X1 Asset has zero estimated salvage value Useful life of five years for both GAAP and tax depreciation GAAP depreciation – straight-line method Tax depreciation – double declining balance method (i.e. 40% of the asset’s depreciable base is depreciated in year one) Tax rate of 30% Select one: a. $2,000 b. $600 c. NA – should be a deferred tax liability instead...
Vaughn Manufacturing purchased a depreciable asset for $572000. The estimated salvage value is $27000, and the...
Vaughn Manufacturing purchased a depreciable asset for $572000. The estimated salvage value is $27000, and the estimated useful life is 10000 hours. Carson used the asset for 1300 hours in the current year. The activity method will be used for depreciation. What is the depreciation expense on this asset in the current year? $545000 $54500 $70850 $77870
Marigold Corp. purchased a depreciable asset for $617000 on January 1, 2018. The estimated salvage value...
Marigold Corp. purchased a depreciable asset for $617000 on January 1, 2018. The estimated salvage value is $59000, and the estimated useful life is 9 years. The straight-line method is used for depreciation. In 2021, Marigold changed its estimates to a total useful life of 5 years with a salvage value of $96000. What is 2021 depreciation expense? $62000 $186000 $92400 $167500
Deuce Company purchased a truck for $80,000 on January 1, 2018. The asset has an expected...
Deuce Company purchased a truck for $80,000 on January 1, 2018. The asset has an expected salvage value of $8,000 at the end of its five-year useful life. Calculate depreciation expense in 2019 (the second year) under: Straight-line depreciation? (2 points) Double-declining balance depreciation? (3 points) Sum-of-years digits depreciation? (3 points)
On October 1, 2021, Holt Company places a new asset into service. The cost of the...
On October 1, 2021, Holt Company places a new asset into service. The cost of the asset is $120,000 with an estimated 5-year life and $30,000 salvage value at the end of its useful life. What is the depreciation expense for 2021 if Holt Company uses the straight-line method of depreciation?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT