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the rx drug company has just purchased a capsuling machine for $85,000. the plant engineer estimates the machine has a useful life of 5 years and no salvage value. compute the depreciation at the end of year 4 using double declining balance (ddb) depreciation.

Answer :

Varshamittal029go

A method for calculating accelerated depreciation used in business accounting is the double-declining balance (DDB) method. Particularly, the DDB technique depreciates assets twice as quickly as the conventional declining balance method.

In the given question,

                              Cost of machine = $85,000

                              Useful Life = 5 years

                              Salvage Value = 0

According to straight line depreciation method,

                              Depreciation = (Cost of the Machine - Salvage Value)/

                                                         Useful Life

                                                     = (76000 - 0)/5

                                                     = $15,200

Therefore, We know that, according to double declining method of Depreciation,

                 Depreciation rate (calculate with the use of SLM depreciation)

               = Annual depreciation as SLM/Cost of the Machine after

                  adjustment for Salvage value

               = 15200/76000 = 20%

Also,

                Depreciation rate as per double declining method = 20%*2

                                                                                                       = 40%

Now,

Depreciation (Year 1) = 76000*.40

                                   = 30400

Depreciation (Year 2) = (76000 - 30400)*.40

                                    = 18240

Depreciation (Year 3) = (76000 - 30400 - 18240)*.40

                                    = 10944

Depreciation (Year 4) = (76000 - 30400 - 18240 - 10944)*.40

                                    = 6566.40

Depreciation (Year 5) = 76000 - 30400 - 18240 - 10944 - 6566.40

                                    = 9849.60

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Rafikiedu08go

A method for calculating accelerated depreciation used in business accounting is the double-declining balance (DDB) method. Particularly, the DDB technique depreciates assets twice as quickly as the conventional declining balance method.

In the given question,

                             Cost of machine = $85,000

                             Useful Life = 5 years

                             Salvage Value = 0

According to straight line depreciation method,

                             Depreciation = (Cost of the Machine - Salvage Value)/

                                                        Useful Life

                                                    = (76000 - 0)/5

                                                    = $15,200

Therefore, We know that, according to double declining method of Depreciation,

                Depreciation rate (calculate with the use of SLM depreciation)

              = Annual depreciation as SLM/Cost of the Machine after

                 adjustment for Salvage value

              = 15200/76000 = 20%

Also,

               Depreciation rate as per double declining method = 20%*2

                                                                                                     = 40%

Now,

Depreciation (Year 1) = 76000*.40

                                  = 30400

Depreciation (Year 2) = (76000 - 30400)*.40

                                   = 18240

Depreciation (Year 3) = (76000 - 30400 - 18240)*.40

                                   = 10944

Depreciation (Year 4) = (76000 - 30400 - 18240 - 10944)*.40

                                   = 6566.40

Depreciation (Year 5) = 76000 - 30400 - 18240 - 10944 - 6566.40

                                   = 9849.60

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https://brainly.com/question/28089492

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