4 A companys property records revealed the following informa

4. A company\'s property records revealed the following information about its plant assets: ted Life Cost $82,000 45,000 $8,000 3,600 Depreciation Method Straight-line 5 years Jan 1 July 1 te the depreciation expense for each machine in Year I and Year 2 for the years ended December 31. Show your work for credit. (2 points) Machine 1: Year 1 Machine 2 Year l Year 2 Year 2

Solution

Machine-A: Cost of machine 82000 Less: Salvage 8000 Depreciable amount 74000 Divide: Life of assets 5 Annual depreciation 14800 Depreciation Year-1 14800 Depreciation Year-2 14800 Machine-B: Rate of dep under SLM (100/5): 20% Rate of Dep under DDB: 40% Depreciation in Year-1 9000 (45000*40% *6/12) Depreciation in Year-2 Book value in beg of Year-2 36000 (45000-9000) Rate of dep 40% Depreciation Year-2 14400 Machine-1 Year-1: 14800 Year-2: 14800 Machine-2 Year-1 9000 Year-2 14400