Question

g A machine with a cost of $54,400.00 has an estimated residual value of $4,031.00 and an estimated life of 5 years or 18,293 hours. What is the amount of depreciation for the second full year, using the double declining-balance method?

Answer 1

Depreciation expense Year 2= $12,088

Step-by-step explanation:

Giving the following information:

A machine with a cost of $54,400.00 has an estimated residual value of $4,031.00 and an estimated life of 5 years

To calculate the depreciation expense under the double-declining balance, we need to use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Year 1= [(54,400 - 4,031)/5]*2= $20,148

Year 2= [(50,369 - 20,148)/5]*2= $12,088