Question

TB MC Qu. 08-152 Minor Company installs a machine... Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. Determine the machines' first year depreciation under the double-declining-balance method.

Answer 1

Answer:

The correct answer is "$54000".

Explanation:

According to the question,

Annual depreciation rate will be:

= $\frac{100 \ percent}{5}$

= $20$ (%)

hence,

The depreciation as per double decline will be:

= $2\times Annual \ depreciation \ rate\times Beginning \ value$

By putting the values, we get

= $2\times 20 \ percent\times 135000$

= $54000$ ($)