Question

Sunland Company purchased machinery on January 1, 2020, for $90,400. The machinery is estimated to have a salvage value of $9,040 after a useful life of 8 years.
Compute 2020 depreciation expense using the double-declining-balance method.
Depreciation expense $________

Compute 2020 depreciation expense using the double-declining-balance method, assuming the machinery was purchased on October 1, 2020. (Round answer to 0 decimal places, e.g. 5,125.)
Depreciation expense $________

Answer 1

Answer:

$22,600; $5,650

Explanation:

Double-declining-balance method rate:

= (100% ÷ No. of years of life of assets ) × 2

= (100% ÷ 8) × 2

= 25%

1. 2020 depreciation expense:

= Assets cost × Depreciation rate

= $90,400 × 25%

= $22,600

2. 2020 depreciation expense:

= Assets cost × Depreciation rate

= $90,400 × 25% × 3/12

= $5,650