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11 December, 18:30

A machine is purchased on January 1, 2018, for $102,000. It is expected to have a useful life of eight years and a residual value of $11,000. The company closes its books on December 31. Under the double-declining balance method, what is the total amount of depreciation to be expensed during the 2019

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  1. 11 December, 19:10
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    Depreciation expense 2019 = $17,062.5

    Explanation:

    Giving the following information:

    Purchase price = 102,000

    Useful life = 8

    Salvage value = 11,000

    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) ]

    2018 = 2*[ (102,000 - 11,000) / 8] = $22,750

    2019 = 2*[ (91,000 - 22,750) / 8] = $17,062.5
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