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Home / Questions / Freedom Co. purchased a new machine on July 2, 2016, at a total installed cost of $43,000. The machi

Freedom Co. purchased a new machine on July 2, 2016, at a total installed cost of $43,000. The machi

Freedom Co. purchased a new machine on July 2, 2016, at a total installed cost of $43,000. The machine has an estimated life of five years and an estimated salvage value of $6,700.

 

Required:

a-1. Calculate the depreciation expense for each year of the asset's life using Straight-line depreciation.

   
 
 
Year Depreciation Expense
1  
2  
3  
4  
5  

 

a-2. Calculate the depreciation expense for each year of the asset's life using Double-declining-balance depreciation.

   
 
 
Year Depreciation Expense
1  
2  
3  
4  
5  

b. How much depreciation expense should be recorded by Freedom Co. for its fiscal year ended December 31, 2016, under each method? (Note: The machine will have been used for one-half of its first year of life.)

   
 
 
  Depreciation Expense
Straight‑line  
Double-declining balance  

c. Calculate the accumulated depreciation and net book value of the machine at December 31, 2017, under each method.

   
 
 
  Cost Accumulated Depreciation Net Book Value
Straight‑line $43,000    
Double-declining‑balance 43,000    
 

Apr 04 2020 View more View Less

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