Formolo ltd purchased a new machine on july 1 2016 at a, Ask an Expert

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Formolo Ltd. purchased a new machine on July 1, 2016, at a cost of $128,000, installation and the custom transport box cost $4,000. The machine has an estimated life of five years and an estimated salvage value of $16,000.

Required:

A) Calculate the depreciation expense for each year of the asset’s life using:

1. Straight-line depreciation.

2. Double-declining-balance depreciation.

B) How much depreciation expense should be recorded by Formolo for its fiscal year ended December 31, 2016, under each method?

C) Calculate the accumulated depreciation and net book value of the machine at December 31, 2017, under each method.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M92040468

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