Freedom Co. purchased a new machine on July 2, 2016, at a total installed cost...
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Accounting
Freedom Co. purchased a new machine on July 2, 2016, at a total installed cost of $46,000. The machine has an estimated life of five years and an estimated salvage value of $6,600.
Required:
a-1. Calculate the depreciation expense for each year of the asset's life using Straight-line depreciation. Year 1 through 5
a-2. Calculate the depreciation expense for each year of the asset's life using Double-declining-balance depreciation. Year 1 through 5
b. How much depreciation expense should be recorded by Freedom Co. for its fiscal year ended December 31, 2016, under each method? (Note: The machine will have been used for one-half of its first year of life.)
Straightline:
Double-declining balance:
c. Calculate the accumulated depreciation and net book value of the machine at December 31, 2017, under each method.
Straightline cost $46,000
Double-declining balance cost $46,000
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