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27 December, 06:16

Mullen Company purchased a new machine costing $55,200 on January 1, 2017. The machine is expected to have a $3,600 salvage value at the end of its useful life of six years. What is the depreciation expense that Mullen Company records for 2017 using the double-declining-balance method?

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  1. 27 December, 06:43
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    depreciation expense for 2017

    Explanation:

    Double Declining

    Year Beginning Dep-Expense Acc. / : Dep Ending

    $55,200.00

    1 $55,200.00 $18,400.00 $18,400.00 $36,800.00

    2 $36,800.00 $12,266.67 $30,666.67 $24,533.33

    3 $24,533.33 $8,177.78 $38,844.45 $16,355.55

    4 $16,355.55 $5,451.85 $44,296.30 $10,903.70

    5 $10,903.70 $3,634.57 $47,930.87 $7,269.13

    6 $7,269.13 $3,669.13 $51,600.00 $3,600.00

    The DD rate is done by appling:

    straight line rate x 2

    (1/6) x 2 = 2/6 = 1/3

    to net book value.
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