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depreciation expense: declining-balance

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Millco, Inc., acquired a machine that cost $410,000 early in 2013. The machine is expected to last for ten years, and its estimated salvage value at the end of its life is $61,000.

a. Using straight-line depreciation, calculate the depreciation expense to be recognized in the first year of the machine's life and calculate the accumulated depreciation after the sixth year of the machine's life.

Depreciation expense =
Accumulated depreciation =

b. Using declining-balance depreciation at twice the straight-line rate, calculate the depreciation expense for the third year of the machine's life.

Depreciation expense

c. What will be the net book value of the machine at the end of its ten year of use before it is disposed of, under each depreciation method?

Straight-line depreciation
Declining-balance depreciation

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Solution Summary

This solution would explain the calculation of depreciation expense, accumulated depreciation under straight line and declining balance method.

See Also This Related BrainMass Solution

Effects of straight-line versus double declining-balance depreciation

Same Day Laundry Services purchased a new steam press January 1, for $35,000. It is expected to have a five-year useful life and a $3,000 salvage value. Same Day expects to use the steam more extensively in the early years of its life.


a. Calculate the depreciation expense for each of the five years, assuming the use of straight-line depreciation.

b. Calculate the depreciation expense for each of the five years, assuming the use of double-declining-balance depreciation.

c. Would the choice of one depreciation method over another produce a different amount of cash flow for any year? Why or why not?

d. Assume that Same Day Laundry Services sold the steam press at the end of the third year for $20,000. Compute the amount of gain or loss using each depreciation method.

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