APPLY THE CONCEPTS: Calculate and determine depreciation using the declining bal

Question

APPLY THE CONCEPTS: Calculate and determine depreciation using the declining balance method The machine purchased by Atherton Fuel Corp. (see journal entry above) is expected to have a useful life of four years. At the end of its useful life, the salvage value of the machine is estimated to be $5,000. Atherton Fuel Corp.'s fiscal year ends each December 31. The company has elected to depreclate the machine using the declining balance method at two times the straight-line rate. Using the data above, calculate the depreciation rate for the machine Depreciation Rate- Complete the table below: Declining Balance Method Year Depreciation Accumulated expense depreciation value 2011 2012 2013 2014

Explanation / Answer

Since asset useful life is 4 year, straight line Depreciation rate will be 1/4*100=25%. Since for declining method, rate to be taken double the straight line rate, we will consider rate at 50% (25*2)

Since, value of asset not given for calculation of depreciation and book value, lets assume value of asset 100000

.

Since asset useful life is 4 year, straight line Depreciation rate will be 1/4*100=25%. Since for declining method, rate to be taken double the straight line rate, we will consider rate at 50% (25*2)

Since, value of asset not given for calculation of depreciation and book value, lets assume value of asset 100000

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