Question

Martin Company purchases a machine at the beginning of the year at a cost of $60,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 4 years with a $5,000 salvage value. Depreciation expense in year 4 is:

$30,000.

$2,500.

$3,750.

$5,000.

$13,750.

Answer 1

Answer: $2500

Explanation:

Annual period Double Decline Depreciation Depreciation for the period Beginning of period Depreciation Annual Book value Rate Depreciation Expenses 11 60000 50% 30000 21 30000 50% 15000 3 15000 50% 7500 7500 33.333% 2500 Total 55000 End of Period Accumulated Year end Depreciation book value 30000 30000 45000 15000 52500 7500 55000 5000 Depreciation rate =( 1/ life of the machine)*2