A company purchased equipment valued at $825,000 on January 1.The equipment has an estimated useful life of seven years or six million units.The equipment is estimated to have a salvage value of $35,000.Assuming the double declining balance method of depreciation,what is the annual depreciation for the second year if .5 million units were produced?

Question

Quizplus · Accepted Answer

100%/7 = 14*2 = 28% DDB
Year 1: 825,000*.28 = $231,000 (Depreciation) BV: 594,000
Year 2: 594,000*.28 = $166,320 (Depreciation)

A Company Purchased Equipment Valued at $825,000 on January 1