Assume Input Outzone Inc. purchased a machine for $92,000 on January 1, 2014 whi

Question

Assume Input Outzone Inc. purchased a machine for $92,000 on January 1, 2014 which is expected to have a useful life of 4 years. At the end of its useful life, the salvage value of the machine is estimated to be $6000. Input Outzone Inc.'s fiscal year ends each December 31. The company has elected to depreciate the machine using the declining balance method at two times the straight-line rate. Please fill out the table below. ignore the empty column.

Depreciation rate: 2*25%=50%

Declining Balance Method

Year Depreciation Response Assumulated Depreciation Book Value 2014 $46000 $46000 2015 2016 2017

Explanation / Answer

Solution:

Year Depreciation response Accumulated Depreciation Book Value 2014 46,000 46,000 46,000 2015 23000 23000 23000 2016 11500 11500 11500 2017 5750 5750 5750

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