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Black_prince [1.1K]
3 years ago
10

[The following information applies to the questions displayed below.] On April 1, 2016, Cyclone's Backhoe Co. purchases a trench

er for $318,000. The machine is expected to last five years and have a salvage value of $59,000. Compute depreciation expense for both years ending December 2016 and 2017 assuming the company uses the double-declining-balance method. (Enter all amounts positive values.)
Business
1 answer:
MissTica3 years ago
3 0

Answer:

2016= Annual depreciation= $77,700

2017= Annual depreciation= $75,620

Explanation:

Giving the following information:

Purchase price= $318,000.

Useful life= 5 years

Salvage value= $59,000

<u>To calculate the depreciation expense, we need to use the following formula:</u>

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

Annual depreciation= 2*[(318,000 - 59,000)/5]= 103,600

<u>2016:</u>

Annual depreciation= (103,600/12)*9= 77,700

<u>2017:</u>

Annual depreciation= [(259,000 - 77,700)/5]*2= 75,620

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Answer:

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Lorenzo Company uses a job order costing system that charges overhead to jobs on the basis of direct materials cost. At year-end
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