2. A company\'s property records revealed the following information about its pl

Question

2. A company's property records revealed the following information about its plant assets:

Machine No.

Cost

Salvage Value

Purchase Date

Depreciation Method and Estimate Life

1

$42,000

$3,000

10/1/08

Straight-line (3 years)

2

86,000

8,600

1/4/08

Double-declining-balance (5 years)

Calculate the depreciation expense for each machine for the year ended December 31, 2008, for the year ended December 31, 2009, and  for the year ended December 31, 2010.
Machine 1:
2008 _______________________

2009 _______________________

2010 _______________________


Machine 2:

2008 _______________________

2009 _______________________

2010 _______________________

Machine No.

Cost

Salvage Value

Purchase Date

Depreciation Method and Estimate Life

1

$42,000

$3,000

10/1/08

Straight-line (3 years)

2

86,000

8,600

1/4/08

Double-declining-balance (5 years)

Explanation / Answer

Answers: Depreciation

Machine 1 : Annual Depreciation = (42000-3000)/3 = $13,000

2008 = 13000*3/12 = 3250

2009 = 13000

2010 = 13000

Machine 2: Assuming date as 4th jan 2008

2008 = 86000*40% = 34,400

2009 =(86000-34400)*40% = 20640

2010 = (86000-34400-20640) *40/100 = $ 12384

THanks

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