In recent years Wang Company purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant selected the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.
Machine 1
Jan. 1, 2008
Cost $96,180
Salvage Value $14,040
Useful Life (in years) 6
Use Straight-line Method
Machine 2
July. 1, 2009
Cost 91,200
Salvage Value 10,930
Useful Life (in years) 5
Use Declining balance Method
Machine 3
Nov. 1, 2009
Cost 74,880
Salvage Value 6,720
Useful Life (in years) 6
UseUnits-of-activity
For the declining-balance method, Wang Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 24,000. Actual hours of use in the first 3 years were: 2009, 500; 2010, 4,600; and 2011, 5,300.
(a)Compute the amount of accumulated depreciation on each machine at December 31, 2011. (Round all answers to 0 decimal places, e.g. 2,510. For Units-of-activity method, round per unit cost to 2 decimal places, e.g. 25.10 before calculating depreciation.)
Machine 1$ 54760
Machine 2$
Machine 3$ 29536
(b)If machine 2 was purchased on October 1 instead of July 1, what would be the depreciation expense for this Machine in 2009? In 2010?
2009$
2010$
I understand how to use the straightline and units of activity method but the double declining balance method is confusing me.
The rate we would be using is .40.. I think.
Machine 1
Jan. 1, 2008
Cost $96,180
Salvage Value $14,040
Useful Life (in years) 6
Use Straight-line Method
Machine 2
July. 1, 2009
Cost 91,200
Salvage Value 10,930
Useful Life (in years) 5
Use Declining balance Method
Machine 3
Nov. 1, 2009
Cost 74,880
Salvage Value 6,720
Useful Life (in years) 6
UseUnits-of-activity
For the declining-balance method, Wang Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 24,000. Actual hours of use in the first 3 years were: 2009, 500; 2010, 4,600; and 2011, 5,300.
(a)Compute the amount of accumulated depreciation on each machine at December 31, 2011. (Round all answers to 0 decimal places, e.g. 2,510. For Units-of-activity method, round per unit cost to 2 decimal places, e.g. 25.10 before calculating depreciation.)
Machine 1$ 54760
Machine 2$
Machine 3$ 29536
(b)If machine 2 was purchased on October 1 instead of July 1, what would be the depreciation expense for this Machine in 2009? In 2010?
2009$
2010$
I understand how to use the straightline and units of activity method but the double declining balance method is confusing me.
The rate we would be using is .40.. I think.