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Problem 9-08A (Part Level Submission) In recent years, Cullumber Company has purchased three machines. Because of frequent em

(b) If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2021?

Please Show all work for part B :)

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Answer #1

B)

Cost of machine 2 = $81,000

Useful life of machine 2 = 5 years

Double declining depreciation rate = 2 x 1/Useful life

= 2 x 1/5

= 40%

Depreciation expense for year 2021 = Cost of machine x Double declining depreciation rate x Time period

= 81,000 x 40% x 9/12

= $24,300

Book value of machine at the end of year 2021 = Cost of machine - Depreciation expense for year 2021

= 81,000 - 24,300

= $56,700

Depreciation expense for year 2022 = Book value of machine at the end of year 2021 x Double declining depreciation rate

= 56,700 x 40%

= $22,680

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