Question: To determine which depreciation method for Machine B reports the highest depreciation expense, we generally consider the two most common methods: the Straight-Line method and
To determine which depreciation method for Machine B reports the highest depreciation expense, we generally consider the two most common methods: the Straight-Line method and the Declining Balance method (often the Double Declining Balance method for faster depreciation). If details are provided for other specific methods, such as Units of Production, we would need those specifics to make a full comparison. General Comparison: Year 1 (2025): Double Declining Balance Method typically reports the highest depreciation expense in the first year because it accelerates depreciation by applying a higher rate to the dwindling book value of the asset. Year 4 (2028): By year 4, the Straight-Line Method generally might surpass the declining balance method in terms of annual depreciation expense, as the latter decreases annually. Total Over 4-Year Period: The total depreciation expense over the 4 years will be the same for both methods, provided there are the same cost basis and salvage (residual) value. Both methods eventually depreciate the asset down to its salvage value. Assumptions for Calculation: Cost and Salvage Value should be provided to compute specific numbers. If Machine B uses one of these or other specified methods, exact details of method application would be needed to refine this analysis. Conclusion: Highest in Year 1 (2025): Double Declining Balance Highest in Year 4 (2028): Straight-Line (potentially) Highest Total over 4 Years: Both equal, as they depreciate to t
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
