ABC corp acquired a machine on January 1, 2015 for $240,000. The machine has an estimated...
ABC corp acquired a machine on January 1, 2015 for $240,000. The machine has an estimated useful life of 4 years and a residual value of $40,000. ABC corp used the double-declining balance method of depreciation. What depreciation expense should ABC corp recognize for this machine in 2017?
Homework Answers
| Year | Beginning Value | Depreciation Expense | Accumulated Depreciation | Ending Value |
| 2015 | 240,000 | 240,000 x 50% = 120,000 | 120,000 | 240,000-120,000 = 120,000 |
| 2016 | 120,000 | 120,000 x 50% = 60,000 | 120,000+60,000 = 180,000 | 240,000-180,000 = 60,000 |
| 2017 | 60,000 | 60,000 x 50%= 30,000 | 180,000+30,000 = 210,000 | 240,000-210,000 = 30,000 |
Double declining depreciation rate = 2 x 1/useful life
= 2 x 1/4
= 50%
Depreciation expense should ABC corp recognize for this machine in 2017 = $30,000
Kindly comment if you need further assistance. Thanks‼!
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