What is the net book value of the machine

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Reference no: EM132461819

Problem - On January 1, 2018, Seahawks Corp. purchased a new machine. The following information was available:

Cost

$500,000

Estimated salvage or residual value

$100,000

Estimated useful life

5 years

Seahawks Corp.'s year-end is December 31.

The machine is expected to produce a total of 500,000 components over the next five years, as follows:

Year

Amount of Components

2018

80,000

2019

60,000

2020

150,000

2021

180,000

2022

30,000

Required -

1. Calculate the depreciation expense for 2020 using the double-diminishing-balance method.

2. At the end of the five years, what is the net book value of the machine? You do not need to show calculations.

3. If this was your company, which method of depreciation would you choose to depreciate this machine?

4. What would the adjusting entry look like for the 2021 depreciation expense under the straight-line depreciation method?

Reference no: EM132461819

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