A machine, purchased for $50,000, has a depreciable life of five years. It will have an expected salvage value of $4,500 at the end of the depreciable life. Find the yearly depreciation, Book value every year using the following methods. 1. Straight Line Method 2. Declining balance method a = 130% 3. Double declining balance method

A machine, purchased for $50,000, has a depreciable life of five years. It will have an expected salvage value of $4,500 at the end of the depreciable life. Find the yearly depreciation, Book value every year using the following methods. 1. Straight Line Method 2. Declining balance method a = 130% 3. Double declining balance method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A machine, purchased for $50,000, has a depreciable life of five years. It will have an expected salvage value
of $4,500 at the end of the depreciable life. Find the yearly depreciation, Book value every year using the
following methods.
1. Straight Line Method
2. Declining balance method a = 130%
3. Double declining balance method
4. Sum of year digit.
5. If the machine has a capacity of 50,000 units for its life span. What is the depreciation and book value if
the machine produces 20,000 units, 15,000 units, 10,000 units, 3,000 units and 2,000 units yearly from
year 1 to 5 accordingly.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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