Question

Computing Straight-Line and Double-Declining-Balance Depreciation On January 2, 2016, Fischer Company purchases a machine that manufactures a part for one of its key products. The machine cost $264,600 and is estimated to have a useful life of six years, with an expected salvage value of $22,500. Compute depreciation expense for 2016 and 2017 for the following depreciation methods. a. Straight-line. b. Double-declining balance. 2016 2017 Straight-line Answer 0 Answer 0 Double-declining Answer 0 Answer 0

Answer 1

Answer:

Straight-line  

depreciation expense for 2016 =40350

depreciation expense for 2017 =40350

Double-declining-balance

depreciation expense for 2016 =105840

depreciation expense for 2017 =63504

Explanation:

Schedule of depreciation expense per year for the machine under the two depreciation methods is attached.

Original Value=264600

Residual Value=22500

Useful life=6

Straight-line

depreciation expense = (Original Value -Residual Value)/Useful life

depreciation expense = 40350

Double-declining-balance  

Depreciation rate=1/useful life *100

Depreciation rate   20,00%