Sunland Company purchased a new machine on October 1, 2017, at a cost of $86,600

Question

Sunland Company purchased a new machine on October 1, 2017, at a cost of $86,600. The company estimated that the machine has a salvage value of $8,400. The machine is expected to be used for 65,700 working hours during its 8-year life. Compute depreciation using the following methods in the year indicated. (a) Your answer is incorrect. Try again. Declining-balance using double the straight-line rate for 2017 and 2018. (Round answers to O decimal places, e.g. 125) 2017 2018 Depreciation using the Declining-balance method 2444 9470

Explanation / Answer

Calculations:

Straight-line depreciation rate = 100% / 8 years = 12.50%

DDB depreciation rate = 12.50% x 200% = 25%

Partial year depreciation = $86600 x 25% x 3/12 = $5412.50

2017 2018 Depreciation using the Declining-balance method $ 5413 20297

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