Seneca Valley owns a machine that it purchased on Jan 1, 2010 for $600,000. The machine had an estimated useful life of 5 years and an estimated residual value of $100,000. The company uses the declining balance method with a rate of 40%. The machine was sold on December 31, 2012 for $140,000. What was the depreciation expense for 2010?

Question

Quizplus · Accepted Answer

The declining balance method calculates depreciation by applying a fixed rate to the book value at the beginning of each year. For 2010, the depreciation expense is 40% of $600,000, which equals $240,000.

Seneca Valley Owns a Machine That It Purchased on Jan