Question

In: Accounting

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 2 years ago
Next > < Previous

Related Solutions

Central Supply purchased a new printer for $70,000 in January of 2017. It has a fiscal...
Central Supply purchased a new printer for $70,000 in January of 2017. It has a fiscal yearend of December 31. The printer is expected to operate for nine years, after which it will be sold for salvage value (estimated to be $6,550). a.      (i) How much is the depreciation expense for the year end December 2017 and for yearend December 2018 if the company uses the double-declining-balance method? (ii) What does the disclosure look like for the Balance Sheet as it...
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...
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $39,700....
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $39,700. The printer is expected to have a four-year useful life and a $3,700 salvage value. The expected print production is estimated at $1,770,500 pages. Actual print production for the four years was as follows: Year 1 550,700 Year 2 477,500 Year 3 375,300 Year 4 390,000 Total 1,793,500 The printer was sold at the end of Year 4 for $4,100. Required a. Compute the...
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $39,700....
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $39,700. The printer is expected to have a four-year useful life and a $3,700 salvage value. The expected print production is estimated at $1,770,500 pages. Actual print production for the four years was as follows: Year 1 550,700 Year 2 477,500 Year 3 375,300 Year 4 390,000 Total 1,793,500 The printer was sold at the end of Year 4 for $4,100. b. Compute the depreciation...
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
A project has an initial cost of $300,000, expected net cash inflows of $67,500 per year...
A project has an initial cost of $300,000, expected net cash inflows of $67,500 per year for 7 years, and a cost of capital of 11%. What is the project's NPV? What is the IRR and the PI? What is the payback period?
The proposed costs to operate this new facility are as follows: Expected Monthly Revenue (Membership Fee):...
The proposed costs to operate this new facility are as follows: Expected Monthly Revenue (Membership Fee): $125 per person Monthly Fixed Costs • Utilities: $590 • Health/Wellness Staff: $2,500 • Arts/Crafts Staff: $2,000 • Supplies: $800 • Fitness Equipment Maintenance Contract: $200 Variable Costs • Monthly Lunch Cost: $25 • Monthly Breakfast Cost: $15 Based on the information above, once the minimum threshold of participants is reached, the initial investment to establish the center is $317,880. The organization anticipates that...
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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT