Sneetch Inc. purchased a star-making machine on 1/1/2011. The cost of the machin
ID: 2468909 • Letter: S
Question
Sneetch Inc. purchased a star-making machine on 1/1/2011. The cost of the machine was $17,000. Its estimated residual value was $2,900 at the end of an estimated 10-year life. (a) Calculate depreciation expense for 2011 and 2012 using the straight-line method. (Omit the "$" sign in your response.) 2011 2012 Depreciation expense $ 1410 $ 1410 (b) Calculate depreciation expense for 2011 and 2012 using the double-declining balance method. (Omit the "$" sign in your response.) 2011 2012 Depreciation expense $ 3400 $ 2720 (c) Calculate the net book value of the machine as of 12/31/2012 under straight-line depreciation. (Omit the "$" sign in your response.) Net book value $ (d) Calculate the net book value of the machine as of 12/31/2012 under double-declining-balance depreciation. (Omit the "$" sign in your response.) Net book value $
Explanation / Answer
Straight line depreciation
(17000 – 2,900) /10 = $1,410
b) Double declining method
Year
Book value
Rate
Depreciation
CV
2011
17,000
20%
3,400
13,600
2012
13,600
20%
2,720
10,880
c) Net book value = 17,000 – (1410*2) = $14,180
d) Net book value = $10,880
(17000 – 2,900) /10 = $1,410
b) Double declining method
Year
Book value
Rate
Depreciation
CV
2011
17,000
20%
3,400
13,600
2012
13,600
20%
2,720
10,880
c) Net book value = 17,000 – (1410*2) = $14,180
d) Net book value = $10,880
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