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12 June, 22:34

g A machine with a cost of $54,400.00 has an estimated residual value of $4,031.00 and an estimated life of 5 years or 18,293 hours. What is the amount of depreciation for the second full year, using the double declining-balance method?

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  1. 12 June, 22:43
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    Depreciation expense Year 2 = $12,088

    Explanation:

    Giving the following information:

    A machine with a cost of $54,400.00 has an estimated residual value of $4,031.00 and an estimated life of 5 years

    To calculate the depreciation expense under the double-declining balance, we need to use the following formula:

    Annual depreciation = 2*[ (book value) / estimated life (years) ]

    Year 1 = [ (54,400 - 4,031) / 5]*2 = $20,148

    Year 2 = [ (50,369 - 20,148) / 5]*2 = $12,088
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