Martin Company purchases a machine at the beginning of the y

Martin Company purchases a machine at the beginning of the year at a cost of $66,000. The machine is depreciated using the double-declining-balance method. The machine’s useful life is estimated to be 4 years with a $5,500 salvage value. Depreciation expense in year 4 is:

Multiple Choice

$15,125.

$4,125.

$33,000.

$2,750.

$5,500.

Solution

Depreciation rate as per straight line method=(100/4)=25%/year

Hence Depreciation expense per year using double decline balance method=2*SLM rate*Beginning value of each period