MC Qu.110 A company bought a piece of equipment for ... A company bought a piece
ID: 2556803 • Letter: M
Question
MC Qu.110 A company bought a piece of equipment for ...
A company bought a piece of equipment for $44,700 and expects to use it for eight years. The company then plans to sell it for $4,500. The company has already recorded depreciation of $38,733.27. Using the double-declining-balance method, what is the company's annual depreciation expense for the upcoming year? (Round your answer to the nearest whole dollar amount.)
$14,700.
$1,467.
$10,050.
$1,492.
A company bought a piece of equipment for $44,700 and expects to use it for eight years. The company then plans to sell it for $4,500. The company has already recorded depreciation of $38,733.27. Using the double-declining-balance method, what is the company's annual depreciation expense for the upcoming year? (Round your answer to the nearest whole dollar amount.)
Explanation / Answer
Depreciation as per double declining balance
=(2/8)($44,700-$38,733.27)
=$1,492
But maximum depreciation can be charged is
=$44,700-$38,733.27
=$1,466.67
Hence depreciation expense for upcoming year under double declining balance method is $1,467.
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