Question

TB MC Qu. 08-152 Minor Company installs a machine... Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. Determine the machines' first year depreciation under the double-declining-balance method.

Answer 1

The correct answer is "$54000".

Step-by-step explanation:

According to the question,

Annual depreciation rate will be:

=
`(100 \ percent)/(5)`

=
`20` (%)

hence,

The depreciation as per double decline will be:

=
`2* Annual \ depreciation \ rate* Beginning \ value`

By putting the values, we get

=
`2* 20 \ percent* 135000`

=
`54000` ($)