A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of seven years. It will have a zero-salvage value at that time. The 200% declining balance method is used to depreciate this asset.What will the depreciation charge be in year seven?What will be the book value at the end of year six?c. What will be the gain (or loss) on the disposal of the asset if it is sold for $1,200 after six years?

Formula: Rate of DDB Depreciation= 100%Usefull Life×2 Given: CNC machine $35,000 Service life 7…

Answered: What will the depreciation charge be in…

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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A new CNC machine has an installed with a cost basis of $35,000 and an estimated service life of seven years. It will have a zero-salvage value at that time. The 200% declining balance method is used to depreciate this asset.

What will the depreciation charge be in year seven?
What will be the book value at the end of year six?
c. What will be the gain (or loss) on the disposal of the asset if it is sold for $1,200 after six years?

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