a. Units produced. b. Residual value. c. Cost. d. Estimated life. 2. A machine w

Question

a. Units produced.

b. Residual value.

c. Cost.

d. Estimated life.

2. A machine with a cost of $51,700.00 has an estimated residual value of $3,180.00 and an estimated life of 5 years or 15,888 hours. What is the amount of depreciation for the second full year, using the double declining-balance method?

a. $20,680.00

b. $19,408.00

c. $10,340.00

d. $12,408.00

3. Computer equipment was acquired at the beginning of the year at a cost of $65,677.00. The computer equipment has an estimated residual value of #3,877.00 and an estimated useful life of 3 years. Determine the 2nd year

Explanation / Answer

1)B.Residual Value

2)Depreciation Base * (2 * 100% / Useful Life of Asset in Years)

51700-3180=48520

48520x2/5=19408

3) $65,677 - $3,877 (residual value) = $62,000 (basis for depreciation

$62,000 / 3 (est useful life - years) = $20,600

4) (Purchase price-residual value)/expected useful life

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