A machine that cost SAR 320,000 is owned by a cement factory. Salvage is estimated at...

A machine that cost SAR 320,000 is owned by a cement factory. Salvage is estimated at SAR 75,000.
Compare book values for MACRS, DB (20%), DDB and standard SL depreciation over a 7-year recovery
period.

Expert Solution

SL depreciation expense per year = $ 35,000

The book value of the machine over the useful life of the asset is calculated as follows

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Double declining rate = 40%

Double declining balance depreciation method
Year	Book value at the beginning of the year	Depreciation rate per year	Depreciation	Book value at the end of the year
1	320000	40.00%	128000	192,000
2	192,000	40.00%	76800	115,200
3	115,200	40.00%	46080	69,120

Rahul Sunny answered 7 months ago

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