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ourse Home Content Discussions Assignments My Tools? Resources, Classlist Help? Homework # omework #6 Question 6 (6 points) On January 2, 2016, Alpha Company acquired a new machine by signing a 5 year note for $62,000. The estimated service life is eight years and the total units of output to be 200,000. The estimated residual value is $8,000. Production for the first four years was as follows: Year Units 2016 25,000 2017 30,000 2018 35,000 2019 20,000 8 11 12 Quiz Started

Solution

Solution:

Straight line rate = 100% ÷ useful life

= 100% ÷ 8

= 12.50%

Double declining balance method

= Straight line rate x 2

= 12.50% x 2

= 25%

Depreciation statement

1. The 2019 depreciation expense = $6,539

2. Accumulated depreciation =$42,383

3. Book value =$19,617

Year	Beginning balance	Rate	Depreciation	Accumulated depreciation	Ending balance
2016	62,000	25%	15,500	15,500	46,500
2017	46,500	25%	11,625	27,125	34,875
2018	34,875	25%	8,719	35,844	26,156
2019	26,156	25%	6,539	42,383	19,617