Freedom Co. purchased a new machine on July 2, 2016, at a total installed cost of $49,000....

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Accounting

Freedom Co. purchaseda new machine on July 2, 2016, at a total installed cost of$49,000. The machine has an estimated life of five years and anestimated salvage value of $6,700.
Required:
a-1.Calculate the depreciation expense for each year of the asset'slife using Straight-line depreciation.
Year Depreciation Expense
1 $8,460
2 $8,460
3 $8,460
4 $8,460
5 $8,460
a-2.Calculate the depreciation expense for each year of the asset'slife using Double-declining-balance depreciation.
Year Depreciation Expense
1 $19,600
2 $11,760
3 $7,056
4 $3,884
5 $0
b.How much depreciation expense should be recorded by Freedom Co. forits fiscal year ended December 31, 2016, under each method?(Note: The machine will have been used for one-half of itsfirst year of life.)
Depreciation Expense
Straight?line $4,230
Double-declining balance $9,800
c.Calculate the accumulated depreciation and net book value of themachine at December 31, 2017, under each method.
Cost Accumulated Depreciation Net BookValue
Straight?line $49,000 $0 $0
Double-declining?balance 49,000 0 0

Answer & Explanation Solved by verified expert

3.6 Ratings (309 Votes)

A1 depreciation under straight line method That is cost salvage valueno of years That is 4900067005 8460 per year B depreciation under double declining method Double declining rate is 8460423002 See Answer

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	Depreciation Expense
Straight?line	$4,230
Double-declining balance	$9,800

	Cost	Accumulated Depreciation	Net BookValue
Straight?line	$49,000	$0	$0
Double-declining?balance	49,000	0	0