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Swifty Corporation purchased a machine for $66000 on July 1, 2020. The company intends to depreciate it over 8 years using the double-declining balance method. Salvage value is $5100. Depreciation for 2020 to the closest dollar is

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Answer:

Depreciation expense= $7,612.5

Explanation:

Giving the following information:

Purchase price= $66,000

Salvage value= $5,100

Useful life= 8 years

First, we need to determine the depreciation expense for the whole year. We will use the following formula:

Annual depreciation= 2*[(book value)/estimated life (years)]

Annual depreciation= 2*[(66,000 - 5,100) / 8]

Annual depreciation= $15,225

For 2020:

Depreciation expense= (15,225/12)*6= $7,612.5