Question

On September 30, 2021, Bricker Enterprises purchased a machine for $203,000. The estimated service life is 10 years with a $19,000 residual value. Bricker records partial-year depreciation based on the number of months in service. Depreciation for 2021, using the double-declining-balance method, would be: (Do not round intermediate calculations.) Multiple Choice

Answer 1

Bricker Enterprises

Depreciation for 2021, using the double-declining-balance method, would be:

= $9,200.

Step-by-step explanation:

a) Data and Calculations:

September 30, 2021:

Cost of purchased machine = $203,000

Estimated residual value = 19,000

Depreciable amount = $184,000

Estimated service life = 10 years

Depreciation rate using the double-declining-balance method = 20% (100/10 * 2)

Depreciation expense for the first year based on the double-declining-balance method:

= $36,800 ($184,000 * 20%)

Prorated depreciation expense for 2021 = $9,200 (($184,000 * 20%) * 3/12))