Question

on april 1, 2019, titan company purchased new machinery for $300,000. the machinery has an estimated useful life of five years, and depreciation is computed by the double-declining-balance method. on march 31, 2021 what will the accumulated depreciation on this machinery be?select answer from the options below$180,000$192,000$120,000$200,000

Answer 1

By March 31, 2021, the accumulated depreciation on the machinery using the double-declining-balance method will be $192,000, computed by summing up two years of depreciation expense.

Step-by-step explanation:

The subject question involves calculating accumulated depreciation using the double-declining-balance method for machinery purchased by Titan Company. On April 1, 2019, the machinery was bought for $300,000 and it has an estimated useful life of five years. To calculate the depreciation expense for each year, we multiply the beginning book value of the asset by double the rate of straight-line depreciation (which would be 40% since the useful life is five years).

• Year 1 depreciation: $300,000 x 40% = $120,000.
• Year 2 depreciation: ($300,000 - $120,000) x 40% = $72,000.

By March 31, 2021, which marks the end of the second year, the accumulated depreciation would be the sum of the depreciation for the two years: $120,000 (Year 1) + $72,000 (Year 2) = $192,000. Therefore, the answer is $192,000.