Final answer:
The depreciation expense for Matile Co.'s machinery for 2013 using the double-declining balance method is $24,000, which is calculated by applying a 40% depreciation rate to the initial cost of $60,000. So, the correct answer to the student's question is a. $24,000.
Step-by-step explanation:
The student's question relates to calculating the depreciation expense of machinery purchased by Matile Co. using the double-declining balance method.
To calculate the depreciation expense for 2013 for the machinery that cost $60,000, with a useful life of 5 years and an estimated salvage value of $5,000, we need to follow a few steps.
First, determine the straight-line depreciation rate which is 1 / useful life of asset.
Hence, the rate is 1 / 5 = 20%. For the double-declining balance method, we double this rate, so 20% × 2 = 40%.
Next, apply this depreciation rate to the book value of the asset at the beginning of the year.
Since this is the first year of the asset's life, the book value is the initial cost, which is $60,000.
The depreciation expense for 2013 would then be 40% of $60,000, which equals $24,000.
Therefore, the correct answer to the student's question is: a. $24,000.
Question: Matile Co. purchased machinery for $60,000 with a useful life of 5 years and an estimated salvage value of $5,000 and using double-declining balance depreciation. What should be the machinery's 2013 depreciation expense?
a. $24,000.
b. $27,600.
c. $30,000.
d. $46,000.