Question

Bonita Industries purchased a machine for $65600 on July 1, 2020. The company intends to depreciate it over 8 years using the double-declining balance method. Salvage value is $5100. Depreciation for 2020 to the closest dollar is:_________

a. $16400
b. $14350
c. $32800
d. $8200

Answer 1

d. $8200

Step-by-step explanation:

The computation of the depreciation expense for the year 2020 is given below:

But before that the depreciation rate is

= 1 ÷ useful life × 2

= 1 ÷ 8 × 2

= 25%

Now the depreciation expense is

= Machine value × depreciation rate × given months ÷ total months

= $65,600 × 25% × 6 months ÷ 12 months

= $8,200