Machiel Manufacturing acquired a $60,000 machine on January 1,20X9.The machine is estimated to have a useful life of 4 years,and a residual value of $10,000.For units-of-production depreciation purposes,the machine is expected to produce 500,000 units.If Machiel Manufacturing uses double-declining-balance depreciation,what is the depreciation expense in 20X9?
A)$12,500
B)$16,000
C)$17,500
D)$25,000
E)$30,000

Question

Quizplus · Accepted Answer

The double-declining-balance depreciation rate is 2 divided by the useful life of the asset. In this case, 2/4 = 0.5 or 50% per year. The depreciation expense for the first year is calculated by applying this rate to the book value of the asset at the beginning of the period. The book value at the beginning is $60,000, so the depreciation expense for 20X9 is 50% of $60,000, which equals $30,000.

Machiel Manufacturing Acquired a $60,000 Machine on January 1,20X9