Depreciation (20 marks)

Assume that at the beginning of Year 1, Sweet Chocolate Factory purchased a machine at a cost of $85,000. The Company expects that machine to remain useful for 4 years and to have a residual value of $5,000.

Complete depreciation table using double-declining-balance method for the first two years only. (12 marks)

Net Book Value

x

Rate

=

Depreciation Expense

Accumulated Depreciation

Net Book Value

Year 1

x

=

Year 2

x

=

At the end of Year 2, Sweet Chocolate Factory sold the machine for $25,000. Record the sale of the machine on December 31, Year 2. (8 marks)

Date

General Journal

Debit

Credit

Dec 31, Year 2

END OF MIDTE

Assume that at the beginning of Year 1, Sweet Chocolate Factory purchased a machine at a cost or $85,000. The Company expects that machine to remain useful for 4 years and to have a residual value of $5,000 1) Complete depreciation table using double declining balance method for the first two years only (12 marks) Net Book Value Depreciation Expense Accumulated Depreciation Rate Net Book Value Year 1 Year 2 2) At the end of Year 2, Sweet Chocolate Factory sold the machine for $25,000. Record the sale of the machine on December 31 Year(8 marks) Dabit Date Credit General Journal DO