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PJS Industries purchased a machine for $88,000 on 1/1/20. It will have an estimated life of eight years, after which it can be sold for $7,000. What is the depreciation expense to be

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Answer:

$16,500

Explanation:

The computation of depreciation expense is shown below:-

depreciation for 2021 under double declining method

Depreciation rate = 100% ÷ 8

= 12.5%

Double declining rate = 12.5% × 2

= 25%

cost = $88,000 × 75%

= $66,000

Depreciation = $66,000 × 25%

= $16,500

Hence the depreciation expense is $16,500 and the same is to be considered

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