Question

Bramble Corp. purchased a machine for $65600 on July 1, 2020. The company intends to depreciate it over 8 years using the double-declining balance method. Salvage value is $5200. Depreciation for 2020 to the closest dollar is:________a. $16650 b. $32300 c. $14569 d. $18325

Answer 1

The depreciation for 2020 using the double-declining balance method is $6,400.

Step-by-step explanation:

To calculate the depreciation for 2020 using the double-declining balance method, you will first need to determine the asset's useful life. In this case, the useful life is 8 years. The double-declining balance method involves dividing the straight-line rate by 2 and then multiplying it by the asset's beginning book value. The straight-line rate is calculated by dividing 100% by the useful life in years.

Step 1: Calculate the straight-line rate: 100% / 8 = 12.5%.

Step 2: Calculate the depreciation amount for 2020: $65,600 x 12.5% = $8,200.

However, the double-declining balance method only depreciates an asset until its book value reaches the salvage value, so we need to check if the depreciation amount exceeds the remaining book value (($65,600 - $8,200) - $5,200). If it does, we need to adjust the depreciation amount to ensure it does not depreciate more than the remaining book value. In this case, the depreciation for 2020 would be adjusted to $6,400.

Answer 2

$16,400

Step-by-step explanation:

Depreciation for 2020 is calculated as;

= (Cost - Nill value) × 50% × 6/12[July to December)

Given that ;

Cost = $65,600

Depreciation = ($65,600 - 0) × 0.5 × 6/12

Depreciation = $16,400

Therefore, depreciation for 2020 is $16,400.