Question

Mullen Company purchased a new machine costing $55,200 on January 1, 2017. The machine is expected to have a $3,600 salvage value at the end of its useful life of six years. What is the depreciation expense that Mullen Company records for 2017 using the double-declining-balance method?

Answer 1

depreciation expense for 2017

Step-by-step explanation:

Double Declining

Year Beginning Dep-Expense Acc. \: Dep Ending

$55,200.00

1 $55,200.00 $18,400.00 $18,400.00 $36,800.00

2 $36,800.00 $12,266.67 $30,666.67 $24,533.33

3 $24,533.33 $8,177.78 $38,844.45 $16,355.55

4 $16,355.55 $5,451.85 $44,296.30 $10,903.70

5 $10,903.70 $3,634.57 $47,930.87 $7,269.13

6 $7,269.13 $3,669.13 $51,600.00 $3,600.00

The DD rate is done by appling:

straight line rate x 2

(1/6) x 2 = 2/6 = 1/3

to net book value.