Answer:First Year Depreciation= $84,000
Second Year Deprecation= $78,400
Explanation:
Using Double declining
We have that :
Depreciation value = Cost - Salvage value
$280,000 - $40,000 =$240,000
Since machine is expected to depreciate for 5 years, Annual depreciation = 240,000 / 5 years
= $48,000
Annual Depreciation Rate = 48,000 / 240,000 = 20%
Therefore, Double declining = 20 x 2 = 40%
First Year Depreciation: from April to December
= 40% x 280,000 x 9/12 months
= $84,000
Second Year Deprecation:
= 40% x (280,000 - 84,000)
= $78,400
