Question
In: Accounting
On January 1, 2019, Seek Company purchased a copy machine. The machine costs $960,000, its estimated...
On January 1, 2019, Seek Company purchased a copy machine. The
machine costs $960,000, its estimated useful life is 8 years, and
its expected salvage value is $60,000.
What is the depreciation expense for 2020 using
double-declining-balance method?
Select one:
A. $157,500
B. $ 105,000
C. $180,000
D. $240,000
Solutions
Expert Solution
- Working
|
A |
Cost |
$ 960,000.00 |
|
B |
Residual Value |
$ 60,000.00 |
|
C=A - B |
Depreciable base |
$ 900,000.00 |
|
D |
Life [in years] |
8 |
|
E=C/D |
Annual SLM depreciation |
$ 112,500.00 |
|
F=E/C |
SLM Rate |
12.50% |
|
G=F x 2 |
DDB Rate |
25.00% |
|
Year |
Beginning Book Value |
Depreciation rate |
Depreciation expense |
Ending Book Value |
Accumulated Depreciation |
|
2019 |
$ 960,000.00 |
25.00% |
$ 240,000.00 |
$ 720,000.00 |
$ 240,000.00 |
|
2020 |
$ 720,000.00 |
25.00% |
$ 180,000.00 |
$ 540,000.00 |
$ 420,000.00 |
- Correct Answer = Option ‘C’ $ 180,000
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Requirement # 1
DATE
ACCOUNT...
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