Accounting Declining-balance method Your answer is partially correct. Try again

Question

Accounting

Declining-balance method Your answer is partially correct. Try again Calculate the amount of depreciation expense that Evers should record for Machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places, e.g. 12.25. Round final answers to O decimal places, e.g. 2,125.) (1) Evers uses the straight-line method of depreciation (2) Evers uses the declining-balance method. The rate used is twice the straight-line rate (3) Evers uses the units-of-activity method and estimates that the useful life of the machine is 104,100 units. Actual usage is as follows: 2017, 42,500 units; 2018, 30,500 units; 2019, 18,500 units; 2020, 12,600 units. Depreciation Expense 2018 2017 2019 2020 Straight-line method Declining-balance method Units-of-activity method 42,475 42,475 42,475 42,475 84,960 44,859 23,685 12,506 69,404 49,808 30,211 20,576

Explanation / Answer

Right answer will be

Cost of machine 42475*4 = 169900

Rate = twice of SLM i.e 25%*2 = 50%

2017 - 166900*50% = 84950

2018 = (166900-84950)*50% = 42475

2019 = (166900-84950-42475)*50% = 21238

2020 = (166900-84950-42475-21238)*50% = 10619

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