12. On January 1,2011 Level Company purchases a machine for $440,000 with an est

Question

12. On January 1,2011 Level Company purchases a machine for $440,000 with an estimated useful life of 10 years and a salvage value of $30,000. What amount of depreciation expense will be recorded on December 31, 2011 if the Level company uses the Double Declining Balance method? Circle the correct multiple choice answer. A 44000 B. 41000 C 82,000 D 88,000 3 Using the information from (12) above, what is the book value of the machine on January 1, 2012? A 440,000 B 396,000 C. 352,000 D 358,000 4.Using the information from (12) above, what is the amount of depreciation expense that should reported for 2012?

Explanation / Answer

Straight line depreciation rate = 440000/10 i.e 44000

= 44000/440000 i.e 10%

1) Depreciation for the first year using double declining balance method

= 440000*10%*2 i.e 88000

2) Net book value at the end of year 1 = ( 440000-88000) i.e 352000

3) Depreciation for the year 2 using double declining balane

= 352000*10% *2 i.e 70400

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.