King Manufacturing Company purchased a machine on January 1, 2016 at a cost of $60,000. The company estimates that the useful life of the machine is 5 years and the salvage value is $5,00O. The company uses the Double Declining Balance Method of depreciation and prepares its financial statements annually at year-end.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Calculate A,B,C,D and E
King Manufacturing Company purchaseda machine on January 1, 2016 at a
cost of $60,000. The comnpany estimates that the useful life of the machine is
5 years and the salvage value is $5,00O. The company uses the Double
Declining Balance Method of depreciation and prepares its financial
statements annually at year-end.
Book Value
Depreciation
Accumulated
Book Value
Year
DDB Rate
(Year Start)
Еxpense
Depreciation
(Year End)
2016
(A)
40%
(В)
$24,000
$36,000
2017
(C)
40%
14,400
38,400
21,600
2018
21.600
40%
8,640
47,040
12,960
2019
12,960
40%
5,184
52,224
7.776
2020
7.776
40%
(D)
55,000
(E)
Transcribed Image Text:King Manufacturing Company purchaseda machine on January 1, 2016 at a cost of $60,000. The comnpany estimates that the useful life of the machine is 5 years and the salvage value is $5,00O. The company uses the Double Declining Balance Method of depreciation and prepares its financial statements annually at year-end. Book Value Depreciation Accumulated Book Value Year DDB Rate (Year Start) Еxpense Depreciation (Year End) 2016 (A) 40% (В) $24,000 $36,000 2017 (C) 40% 14,400 38,400 21,600 2018 21.600 40% 8,640 47,040 12,960 2019 12,960 40% 5,184 52,224 7.776 2020 7.776 40% (D) 55,000 (E)
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