Asked by Sticky Mochi on Jun 20, 2024
Verified
Determine the machines' first year depreciation under the double-declining-balance method.
A) $66,000.
B) $54,000.
C) $24,000.
D) $25,800.
E) $48,000.
Double-declining-balance
A method of accelerated depreciation where an asset’s book value is reduced at double the rate of its straight-line depreciation.
Salvage Value
The anticipated worth of an asset upon its sale following the conclusion of its useful life.
Useful Life
The estimated period over which a fixed asset is expected to be usable for the purpose it was acquired.
- Initiate the straight-line, double-declining-balance, and units-of-production rules for depreciation assessment.
Verified Answer
KU
Keeping Up With KiJun 24, 2024
Final Answer :
B
Explanation :
The double-declining-balance method accelerates depreciation. The straight-line depreciation rate is 100% / 5 years = 20%. Double that for the double-declining balance method is 40%. The depreciation for the first year is 40% of the book value ($135,000 - $0 salvage value in calculation) = $54,000.
Learning Objectives
- Initiate the straight-line, double-declining-balance, and units-of-production rules for depreciation assessment.