Central Supply purchased a new printer for $67,500. The printer is expected to operate for nine...

Central Supply purchased a new printer for $67,500. The printer is expected to operate for nine (9) years, after which it will be sold for salvage value (estimated to be $6,750).

How much is the second year’s depreciation expense if the company uses the double-declining-balance method?

		$15,000
		$11,667
		$18,000
		$13,500
		None of the above

Solutions

Expert Solution

Answer: $11,667

Explanation

	Double Declining Balance Depreciation

	Beginning book value	x	Double the straight-	=	Depreciation expense
			line rate

First year's depreciation	67,500.00	x	2 x 1/9	=	15,000.00
Second year's depreciation	52,500.00	x	2 x 1/9	=	11,667.00


Explanation:
Double-declining-balance rate =2 ×Straight-line rate (1/Useful life)
Book value at beginning of second year = $67,500 – $15,000 = $52,500

ekkarill92 answered 9 months ago

Next > < Previous

Related Solutions

Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,600....

Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,600. The printer is expected to have a four-year useful life and a $3,400 salvage value. The expected print production is estimated at $1,788,000 pages. Actual print production for the four years was as follows: Year 1 554,500 Year 2 481,600 Year 3 384,200 Year 4 388,700 Total 1,809,000 The printer was sold at the end of Year 4 for $3,550. Required a. Compute the...

On January 1, Delivery, Inc. purchased a truck for $67,500 with a $6,000 salvage value and...

On January 1, Delivery, Inc. purchased a truck for $67,500 with a $6,000 salvage value and a four-year life. The company used the straight-line method of depreciation. The truck was sold on December 31, Year 2 for $22,500. Which of the following is one effect of recording the truck sale in the accounting records? Select one: A. The Truck account is reduced by $33,000. B. The Accumulated Depreciation account is reduced by $30,750. C. A loss of $45,000 is recognized....

A new gold mining project is expected to operate for 8 years and will require development...

A new gold mining project is expected to operate for 8 years and will require development costs of $200 million at time zero, $160 million at the end of year 1, and $43 million at the end of year 2. Assuming that 100% of the capital costs are to be depreciated using MACRS (.5 year convention) for mining equipment, determine the total allowable depreciation deduction for each year for the project for the entire 0-8 years

Printing Services is considering replacing its old printer with a new one. The old printer is...

Printing Services is considering replacing its old printer with a new one. The old printer is expected to provide year-end cash inflows of £5,000 in each of the next 3 years before it fails. The new printer costs a significant £20,000 to buy and will last for 4 years. However, it is much more efficient than the old printer and is expected to provide year-end annual cash inflows of £10,000 (i.e., in each year of its life). What is the...

Suppose Mayco wants to replace an existing printer with a new high-speed copier. The existing printer...

Suppose Mayco wants to replace an existing printer with a new high-speed copier. The existing printer was purchased 7 years ago at a cost of $21,000. The printer is being depreciated using straight-line basis assuming a useful life of 12 years and no salvage value. If the existing printer is not replaced, it will have zero market value at the end of its useful life. The new high-speed copier can be purchased for $25,000 (including freight and installation). Over its...

S Sabre is deciding between two new printer supply contracts after its existing supplier's printers started...

S Sabre is deciding between two new printer supply contracts after its existing supplier's printers started catching fire Using the cash flows below ($ millions), which contract is best based on the NPV? Which contract is cheaper for Sabre on an annual basis (EAA)? Which supplier is best if Sabre plans on selling printers for the foreseeable future? Sabre's WACC is 16% Year Supplier 1 Supplier 2 0 -140 -190 1 -110 -80 2 -110 -80 3 -110 -80 4...

Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected...

Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 12.5 percent. Year/ Annual Operating Cash Flow/ Salvage Value 0/ $22,500/ $22,500 1/ 6,250/ 17,500 2/ 6,250/ 14,000 3/ 6,250/ 11,000 4/ 6,250/ 5,000 5/...

Nine new employees, two of whom are married to each other, are to be assigned nine...

Nine new employees, two of whom are married to each other, are to be assigned nine desks that are lined up in a row. If the assignment of employees to desks is made randomly, what is the probability that the married couple will have nonadjacent desks? (Hint: The event that the couple have nonadjacent desks is the complement of the event that they have adjacent desks.) (Round your answer to the nearest tenth of a percent.)

Central Trailer Supply decided to also use NPV to review the three proposals for its new...

Central Trailer Supply decided to also use NPV to review the three proposals for its new trailer assembly line. Information on each proposal is the same and follows: Proposal X Proposal Y Proposal Z Initial investment in equipment $115,000 $130,000 $145,0000 Working capital needed 0 0 15,000 Annual cash saved by operations: Year 1 55,000 60,000 60,000 Year 2 55,000 40,000 60,000 Year 3 55,000 40,000 60,000 Year 4 55,000 10,000 60,000 Required: Determine each proposal's NPV. A rate of...

A printer was purchased for $8,000 on 1 July 2019. Useful life was estimated as 3...

A printer was purchased for $8,000 on 1 July 2019. Useful life was estimated as 3 years and residual value as $2,000. (Assume financial year 1 July – 30 June). What is the accumulated depreciation (using the straight line method) on 30 June 2021? a. $6,000 b. $4,000 c. $2,000 d. None of the options are correct e. $5,000

Subjects