ABC Company acquired a machine on January 1, year 2016 for $100,000. The machine is depreciated using the double-declining- balance method, and was estimated to have a 10 year useful life and a salvage value of $10,000. On January 1, year 2018, the company revised its estimations as: a useful life of 5 years beginning from that date, and with a salvage value of $15,000 at the end of 5 years. How much depreciation expense should ABC Company recognize in year 2018? Multiple Choice

ABC Company acquired a machine on January 1, year 2016 for $100,000. The machine is depreciated using the double-declining- balance method, and was estimated to have a 10 year useful life and a salvage value of $10,000. On January 1, year 2018, the company revised its estimations as: a useful life of 5 years beginning from that date, and with a salvage value of $15,000 at the end of 5 years. How much depreciation expense should ABC Company recognize in year 2018? Multiple Choice

Name: ABC Company acquired a machine on January 1, year 2016 for $100,000.
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Description: ABC Company acquired a machine on January 1, year 2016 for $100,000. The machine is depreciated using the double-declining-balance method, and was estimated to have a 10 year useful life and a salvage value of $10,000. On January 1, year 2018, theco

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

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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Question

ABC Company acquired a machine on January 1, year 2016 for $100,000. The machine is depreciated using the double-declining-
balance method, and was estimated to have a 10 year useful life and a salvage value of $10,000. On January 1, year 2018, the
company revised its estimations as: a useful life of 5 years beginning from that date, and with a salvage value of $15,000 at the
end of 5 years. How much depreciation expense should ABC Company recognize in year 2018?
Multiple Choice
13,400
O 21,040
25,600
16,000

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