XYZ Company purchased a new machine on January 1, 2021 for $80,000. The machine was assigned...
XYZ Company purchased a new machine on January 1, 2021 for $80,000. The machine was assigned a 10-year life and a $5,000 residual value. XYZ Company will depreciate the machine using the double-declining balance depreciation method. Calculate the amount of accumulated depreciation related to the new machine that would appear in XYZ Company's December 31, 2024 balance sheet.
Homework Answers
Answer
- Working
|
A |
Cost |
$ 80,000.00 |
|
B |
Residual Value |
$ 5,000.00 |
|
C=A - B |
Depreciable base |
$ 75,000.00 |
|
D |
Life [in years] |
10 |
|
E=C/D |
Annual SLM depreciation |
$ 7,500.00 |
|
F=E/C |
SLM Rate |
10.00% |
|
G=F x 2 |
DDB Rate |
20.00% |
|
Year |
Beginning Book Value |
Depreciation rate |
Depreciation expense |
Ending Book Value |
Accumulated Depreciation |
|
2021 |
$ 80,000.00 |
20.00% |
$ 16,000.00 |
$ 64,000.00 |
$ 16,000.00 |
|
2022 |
$ 64,000.00 |
20.00% |
$ 12,800.00 |
$ 51,200.00 |
$ 28,800.00 |
|
2023 |
$ 51,200.00 |
20.00% |
$ 10,240.00 |
$ 40,960.00 |
$ 39,040.00 |
|
2024 |
$ 40,960.00 |
20.00% |
$ 8,192.00 |
$ 32,768.00 |
$ 47,232.00 |
- Correct
Answer:
Accumulated Depreciation on 31 Dec 2024 = $ 47,232
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