A machine cost $1,242,000 on April 1, 2020. Its estimated salvage value is $136,000 and its expected life is 4 years. Calculate the depreciation expense by straight-line for 2020. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Calculate the depreciation expense by double-declining balance for 2021. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Calculate the depreciation expense by sum-of-the-years'-digits for 2021. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Which method would result in the smallest income amount for 2021? Sum-of-the-years'-digits depreciation Straight-line depreciation Double-declining depreciat
A machine cost $1,242,000 on April 1, 2020. Its estimated salvage value is $136,000 and its expected life is 4 years. Calculate the depreciation expense by straight-line for 2020. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Calculate the depreciation expense by double-declining balance for 2021. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Calculate the depreciation expense by sum-of-the-years'-digits for 2021. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Which method would result in the smallest income amount for 2021? Sum-of-the-years'-digits depreciation Straight-line depreciation Double-declining depreciat
Chapter1: Financial Statements And Business Decisions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:A machine cost $1,242,000 on April 1, 2020. Its estimated salvage value is $136,000 and its expected life is 4 years.
Calculate the depreciation expense by straight-line for 2020. (Round answer to 0 decimal places, e.g. 5,275.)
Depreciation expense $
Calculate the depreciation expense by double-declining balance for 2021. (Round answer to 0 decimal places, e.g. 5,275.)
Depreciation expense $
Calculate the depreciation expense by sum-of-the-years'-digits for 2021. (Round answer to 0 decimal places, e.g. 5,275.)
Depreciation expense $
Which method would result in the smallest income amount for 2021?
Sum-of-the-years'-digits depreciation Straight-line depreciation Double-declining depreciation
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