Problem 9-9A Culver Corporation purchased machinery on January 1, 2017, at a cos

Question

Problem 9-9A Culver Corporation purchased machinery on January 1, 2017, at a cost of $330,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $28,000. The company is considering different depreciation methods that could be used for financial reporting purposes. Partially correct answer. Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate.

Explanation / Answer

Straight line method (330,000-28000)/4 75500 Schedule of Depreciation Annual Accumula Book year cost depreciation depreciation Value 1 330,000 75500 75500 254,500 2 330,000 75500 151000 179,000 3 330,000 75500 226500 103,500 4 330,000 75500 302000 28,000 Double declining method rate = /14*2 = 50% year beginning Deprec Accum book value expense cost value 1 330,000 165000 165,000 165,000 2 165,000 82500 247500 82500 3 82,500 41250 288750 41250 4 41,250 13250 302000 28,000

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