Asked by Jesica Alarcon on Jun 17, 2024
Verified
A company's property records revealed the following information about its plant assets:
Calculate the depreciation expense for each machine in Year 1 and Year 2 for the year ended December 31.
Double-Declining-Balance
A method of accelerated depreciation that doubles the regular depreciation rate, reducing the value of an asset more quickly in its earlier years.
Salvage Value
The projected remaining worth of an asset upon the conclusion of its operational lifespan, frequently accounted for in determining depreciation.
Depreciation Expense
An accounting method allocating the cost of a tangible asset over its useful life.
- Understand and calculate the depreciation expense using different methods such as straight-line, double-declining-balance, and units-of-production.
Verified Answer
Years 1 & 2: [($82,000 - $8,000)/4] = $18,500
Machine 2:
Year 1: $46,000 x 40% * 6/12 = $9,200
Year 2: ($46,000 - $9,200)* 40% = $14,720
* DDB depreciation rate = 1/5 * 2 = 40%
Learning Objectives
- Understand and calculate the depreciation expense using different methods such as straight-line, double-declining-balance, and units-of-production.
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