Question

Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the double-declining-balance method.

Answer 1

Year 2= $20,880

Step-by-step explanation:

Giving the following information:

Wickland Company installs a manufacturing machine in its production facility at the beginning of the year for $87,000. The machine's useful life is estimated to be 5 years, with a $7,000 salvage value.

We need to use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Year 1= (87,000/5)*2= 34,800

Year 2= (52,200/5)*2= 20,880