A machine that produces cellphone components is purchased on January 1, 2016, fo

Question

A machine that produces cellphone components is purchased on January 1, 2016, for $196,000. It is expected to have a useful life of four years and a residual value of $12,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2016; 50,000 in 2017; 60,000 in 2018; and 50,000 in 2019. The company has a December 31 year end.

1) Calculate the amount of depreciation to be charged each year using the DOUBLE DIMINISHING BALANCE METHOD.

Rate:

Annual Expense for

2016:

2017:

2018:

2019:

Explanation / Answer

1) Calculate the amount of depreciation to be charged each year using the DOUBLE DIMINISHING BALANCE METHOD.

Straight line rate = 100/4=25%

Double decline rate = 25*2 = 50%

Annual expenses Accumlated dep Book value 2016 98000 98000 98000 2017 49000 147000 49000 2018 24500 171500 24500 2019 12500 184000 12000 Total 184000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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