Freedom Co. purchased a new machine on July 2, 2010, at a total installed cost of $44,000.
Question:
Required:
a. Calculate the depreciation expense for each year of the asset’s life using:
1. Straight-line depreciation.
2. Double-declining-balance depreciation.
3. 150% declining-balance depreciation.
b. How much depreciation expense should be recorded by Freedom Co. for its fiscal year ended December 31, 2010, under each of the three methods?
c. Calculate the accumulated depreciation and net book value of the machine at December 31, 2011, under each of the three methods.
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Step by Step Answer:
a Estimated useful life 5 years Cost of machine 44000 Estimated salvage value 6000 Amount to be depreciated 38000 1 Straightline depreciation Annual d...View the full answer
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Related Book For 
Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
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