Sutter Company purchased a machine on January 1, 20A for $25,000. The machine ha

Question

Sutter Company purchased a machine on January 1, 20A for $25,000. The machine has an estimated useful life of 5 years and a $1,000 residual value. It is now December 31, 20B and Sutter is in the process of preparing financial statements. Complete the following schedule assuming the double (200%) declining-balance method of depreciation.

Depreciation Expense (for the year):

A)   Date: 12/31/20A_______

B)   Date: 12/31/20B _______

Book Value (at the end of the year):

C)   Date: 12/31/20A _______

D)   Date: 12/31/20B _______

Explanation / Answer

Year
Book Value
Year Start Depreciation
Percent Depreciation
Expense Accumulated
Depreciation Book Value
Year End 1 $25,000 40.00% $10,000 $10,000 $15,000 2 $15,000 40.00% $6,000 $16,000 $9,000 3 $9,000 40.00% $3,600 $19,600 $5,400 4 $5,400 40.00% $2,160 $21,760 $3,240 5 $3,240 40.00% $1,296 $23,056 $1,944

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