Question

On January 1, 2021. AB Company purchased a piece of machinery for $80,000. The machine had an estimated useful life of 10 years and a $5,000 residual value. On January 1, 2025, ABC Company determined the life of the machine should be revised from 10 years to 20 years and the residual value adjusted to $1,000 at the end of the twenty years. Assume ABC Company depreciates its assets using the double declining balance method of depreciation. Calculate the amount of accumulated depreciation related to the machine that would appear in ABC's December 31, 2024 balance sheet. 47,232

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Answer 1

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Ana Amouot in $. 5 Colulation of Acamwhitd depreciation as on Dec-31, 2924: Begening carrying Yolue Depreciation © 204 Lend. carrying value 2021 $ 80000 $ 16000 $ 64,000 2022 $ 64000 $ 12800 $ 51,200 2023 $ 51200 $ 10240 $ 40,960 2024 $ 40960 $ 8192 $ 32.768 Accumulated Depreciation | $ 47,232 Note: you are absolutely correct, the revised estimation will make impact from the year 2025. Hence, Accumulated deprecicution up to Dec 31, 2017 : $47232

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