Same Day Service purchased a new steam press on January 1, for$35,000. It is exp

ID: 2447198 • Letter: S

Question

Same Day Service purchased a new steam press on January 1, for$35,000. It is expected to have a five year useful life and a$3,000 salvage value same day expects to use the steam press moreextensively in the early years of its life.
1.Calculate the depreciation expense for each of the fiveyears, assuming the use of double-declining-balancedepreciation Same Day Service purchased a new steam press on January 1, for$35,000. It is expected to have a five year useful life and a$3,000 salvage value same day expects to use the steam press moreextensively in the early years of its life.
1.Calculate the depreciation expense for each of the fiveyears, assuming the use of double-declining-balancedepreciation

Explanation / Answer

c=axb

e=a -c

$35,000

40%

$14,000

$21,000

40%

$8,400

$22,400

$12,600

40%

$5,040

$27,440

$7,560

40%

$3,024

$30,464

$4,536

40%

$1,536a

$32,000

$3,000

Purchase price of steam press 1-Jan $35,000 salvage value $3,000 useful life 5 years Declinning rate 2*1/5 = 40% Computation of depreciation expense usingdouble-declinning method: Year Book value Rate on Depreciation Balance Carrying value beginning of the year Declining Expense Accumulated end of the year balance Depreciation