Seneca Valley owns a machine that it purchased on Jan 1, 2019 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, 2021 for $140,000. What was the depreciation expense for 2019?

Question

Quizplus · Accepted Answer

The depreciation expense for 2019 is calculated using the declining balance method at a rate of 40%. The initial cost of the machine is $600,000. Therefore, the depreciation expense for the first year (2019) is 40% of $600,000, which equals $240,000.

Seneca Valley Owns a Machine That It Purchased on Jan