On January 1,2018,Manzanita Manufacturing purchased a machine for $345,000 with an expected life of 5 years and a residual value of $37,500.In addition,the company paid delivery costs of $3,000 and $12,000 to have the machine installed.Manzanita uses the double-declining-balance method of depreciation. What is the depreciation expense for the first year using the double-declining-balance method?
A)$132,000
B)$144,000
C)$132,500
D)$138,000

Question

Quizplus · Accepted Answer

Depreciation expense = (Cost − Accumulated depreciation)× (2 ÷ Useful life)
= ($345,000 + $3,000 + $12,000)× 2 / 5 = $144,000

On January 1,2018,Manzanita Manufacturing Purchased a Machine for $345,000 with an Expected