manna company owns a machine that was bought on january 1 20

manna company owns a machine that was bought on january 1, 2013 for $ 47300. the machine was estimated to have a useful life of five years and a salvage value of $ 42000. manna uses the double declining balance method of depreciation. how much depreciation expense should the company claim for year 2016?

Solution

In the given situation since the cost of machine is $47300 & salvage value is $42000,total allowable depreciation would be

=47300-42000=5300

The above said $5300 is allowable in the year of acquisition itself.

It means there is no depreciation allowable in coming years including 2016.

So depreciation for 2016 would be ZERO.