On January 1, 2013, Latke Tool and Manufacturing Company purchased a machine that cost $22,000.The machine has an estimated five-year life, and a 10 percent residual value.It is expected to be used for a total of 1,600 productive hours over the next 5 years.During 2013, it was used 400 hours.Latke has a December 31 year-end.What is the depreciation expense for 2013 if Latke uses the accelerated method at a rate of 20%?

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Quizplus · Accepted Answer

The accelerated method at a rate of 20% means using the double-declining balance method. The depreciation expense for 2013 is calculated as 20% of the book value at the beginning of the year. The book value is $22,000, so the depreciation expense is $22,000 * 20% = $4,400.

On January 1, 2013, Latke Tool and Manufacturing Company Purchased