Question 14 A machine initally costing $520000 will have salvage value of $2000 after a 6...

Question 14
A machine initally costing $520000 will have salvage value of $2000 after a 6 year life. using double declining balance depreciation what will the book value be after the third year

Expert Solution

Cost	520,000
Useful life	6
Salvage	2,000
Rate	33.33%

Calculation of rate in double declining balance method:

Therefore, substituting the values, we get.

OR

Year	Opening Book Value	Rate	Depreciation	Closing Book Value
1	520,000.00	33.33%	173,316.00	346,684.00
2	346,684.00	33.33%	115,549.78	231,134.22
3	231,134.22	33.33%	77,037.04	154,097.19
4	154,097.19	33.33%	51,360.59	102,736.59
5	102,736.59	33.33%	34,242.11	68,494.49
6	68,494.49	-	66,494.49	2,000.00

From above table, we can see that book value after 3 years is $154,097.19

Excel Formulas:

jeff jeffy answered 2 years ago

Question: A machine costing $212,600 with a four-year life and an estimated $19,000 salvage value is...

Question: A machine costing $212,600 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 484,000 units of product during its life. It actually produces the following units: 122,100 in 1st year, 123,800 in 2nd year, 120,300 in 3rd year, 127,800 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate - this difference...

a brand new machine is estimated to have a salvage value of P10000 after 10 years...

a brand new machine is estimated to have a salvage value of P10000 after 10 years and book value of P30,000 after 5 years, what is the initial cost of the machine? (assume straight line depreciation)

A new machine costs $42,000 and has a $2000 salvage value at the end of its...

A new machine costs $42,000 and has a $2000 salvage value at the end of its 8-year useful life. Determine the straight-line (SL), and the double declining balance (DDB) depreciation schedules for the machine.

A machine costing $214,800 with a four-year life and an estimated $20,000 salvage value is installed...

A machine costing $214,800 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces the following units: 121,800 in 1st year, 122,600 in 2nd year, 121,500 in 3rd year, 131,100 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $213,200 with a four-year life and an estimated $16,000 salvage value is installed...

A machine costing $213,200 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 493,000 units of product during its life. It actually produces the following units: 122,600 in Year 1, 122,500 in Year 2, 120,100 in Year 3, 137,800 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $213,800 with a four-year life and an estimated $19,000 salvage value is installed...

A machine costing $213,800 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces the following units: 121,700 in 1st year, 123,800 in 2nd year, 121,100 in 3rd year, 130,400 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $209,200 with a four-year life and an estimated $18,000 salvage value is installed...

A machine costing $209,200 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 478,000 units of product during its life. It actually produces the following units: 123,000 in 1st year, 124,100 in 2nd year, 121,200 in 3rd year, 119,700 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $213,600 with a four-year life and an estimated $16,000 salvage value is installed...

A machine costing $213,600 with a four-year life and an estimated $16,000 salvage value is installed in Tonys Company’s factory on January 1. The factory manager estimates the machine will produce 494,000 units of product during its life. It actually produces the following units: 121,800 in Year 1, 123,500 in Year 2, 121,100 in Year 3, 137,600 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $209,000 with a four-year life and an estimated $17,000 salvage value is installed...

A machine costing $209,000 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 480,000 units of product during its life. It actually produces the following units: 122,500 in Year 1, 124,300 in Year 2, 121,600 in Year 3, 121,600 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $209,400 with a four-year life and an estimated $15,000 salvage value is installed...

A machine costing $209,400 with a four-year life and an estimated $15,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the following units: 122,800 in 1st year, 123,200 in 2nd year, 121,500 in 3rd year, 128,500 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted....

Question