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A machine cost €500,000 on April 1, 2018.

Its estimated residual value is €50,000 and


its expected life is eight years.
INSTRUCTION
Calculate the depreciation expense (to the nearest dollar) by each of the following
methods, showing the figures used.
a. Straight-line for 2018
b. Double-declining balance for 2019
c. Sum-of-the-years'-digits for 2019

ANSWER
a. 1/8 x $450,000 x 3/4 = $ 42,188
b. 2019 : 25% x $406,250 = $ 101,563
c. 8/36 x $450,000 x 1/4 = $ 25,000
7/36 x $450,000 x 3/4 = $ 65,625
$ 90,625

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