minor company installs a machine in its factory at the beginning of the year at a cost of $135,000. the…

minor company installs a machine in its factory at the beginning of the year at a cost of $135,000. the machines useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. during its first year, the machine produces 64,500 units of product. determine the machines first - year depreciation under the double - declining - balance method. multiple choice $66,000. $54,000. $24,000. $25,800.

minor company installs a machine in its factory at the beginning of the year at a cost of $135,000. the machines useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. during its first year, the machine produces 64,500 units of product. determine the machines first - year depreciation under the double - declining - balance method. multiple choice $66,000. $54,000. $24,000. $25,800.

Answer

Explanation:

Step1: Calculate straight - line depreciation rate

The straight - line depreciation rate for a 5 - year useful life is $\frac{1}{5}= 0.2$ or 20%.

Step2: Determine double - declining - balance rate

The double - declining - balance rate is $2\times0.2 = 0.4$ or 40%.

Step3: Calculate first - year depreciation

The cost of the machine is $135,000$. First - year depreciation = Cost×Double - declining - balance rate. So, $135000\times0.4=$54000$.

Answer:

$54,000$