Smart Enterprise bought a machine costing $40,000 on 1 January 2015. The machine has a useful life of 4 years. The supplier which sold the machine had agreed to take back the machine for $4,000 at the end of the useful life. The company fiscal year-end is 31 December. Compute the depreciation expense, accumulated depreciation and net book value of the machine for the years 2015, 2016, 2017 and 2018 using: (i) The straight-line method. (ii) The double-declining balance method.
Smart Enterprise bought a machine costing $40,000 on 1 January 2015. The machine has a useful life of 4 years. The supplier which sold the machine had agreed to take back the machine for $4,000 at the end of the useful life. The company fiscal year-end is 31 December. Compute the depreciation expense, accumulated depreciation and net book value of the machine for the years 2015, 2016, 2017 and 2018 using: (i) The straight-line method. (ii) The double-declining balance method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Smart Enterprise bought a machine costing $40,000 on 1 January 2015. The
machine has a useful life of 4 years. The supplier which sold the machine had
agreed to take back the machine for $4,000 at the end of the useful life. The
company fiscal year-end is 31 December.
Compute the
of the machine for the years 2015, 2016, 2017 and 2018 using:
(i) The straight-line method.
(ii) The double-declining balance method.
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