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balu736 [363]
3 years ago
11

A machine with a cost of $65,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours. Wha

t is the amount of depreciation for the second year, using the double declining-balance method?
a. $16,250
b. $32,500
c. $15,000
d. $30,000
Business
1 answer:
forsale [732]3 years ago
3 0

Answer:

The correct answer is C.

Explanation:

Giving the following information:

A machine with a cost of $65,000 has an estimated residual value of $5,000 and an estimated life of 4 years or 18,000 hours.

To calculate the depreciation expense for each year, we need to use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Year1= [(65,000 - 5,000)/4]*2= $30,000

Year2= [(60,000 - 30,000)/4]*2= $15,000

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