Question

Nimo Co. purchased a machine for $12,000 and estimates it will use the machine for five-years with a $2,000 salvage value. Using the double declining-balance depreciation method, compute the machine's first year depreciation expense.

Answer 1

Answer:

$4800

Explanation:

Double declining deprecation method is when the deprecation expense of an asset is accelerated by 2. Depreciation is a method of expensing the cost of an asset.

In calculating depreciation expense using the double declining method , salvage value isn't used.

The formula:

2/ number of years ×(net book value)

2/5 × ($12,000) = $4800