Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 residual value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the double-declining- balance method. A $16,900. B $16,000.. C $18,379. D $20,880.
Salta Company installs a manufacturing machine in its factory at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 residual value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the double-declining- balance method. A $16,900. B $16,000.. C $18,379. D $20,880.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 7EA: Alfredo Company purchased a new 3-D printer for $900,000. Although this printer is expected to last...
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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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![Salta Company installs a manufacturing machine
in its factory at the beginning of the year at a
cost of $87,000. The machine's useful life is
estimated to be 5 years, or 400,000 units of
product, with a $7,000 residual value. During its
second year, the machine produces 84,500 units
of product. Determine the machines' second
year depreciation under the double-declining-
balance method.
A $16,900.
B $16,000..
C $18,379.
D $20,880.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F926b5e8c-3515-4f7f-9eb3-2b6de3531274%2F8dcf818e-5ba0-49ac-af83-d097b7d23d27%2Fgkun6rr5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Salta Company installs a manufacturing machine
in its factory at the beginning of the year at a
cost of $87,000. The machine's useful life is
estimated to be 5 years, or 400,000 units of
product, with a $7,000 residual value. During its
second year, the machine produces 84,500 units
of product. Determine the machines' second
year depreciation under the double-declining-
balance method.
A $16,900.
B $16,000..
C $18,379.
D $20,880.
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