Nomo Co purchased a machinery at the beginning of 2018 The m

Nomo Co. purchased a machinery at the beginning of 2018. The machinery has a cost of $37,000, an estimated life of 5 years, and an estimated residual value of $7,000. A full year\'s depreciation expense is to be recorded in 2018. By what amount would double-declining-balance depreciation exceed straight-line depreciation over the five-year life of the machinery?

Solution

Double decline rate = 100/5*2 = 40%

2018 Depreciation expense = 37000*40% = 14800

There is no excess amount would double-declining-balance depreciation exceed straight-line depreciation over the five-year life of the machinery.