# A surface mount PCB placement/

A surface mount PCB placement/soldering line is to be installedfor \$1,300,000. It will have a salvage value of \$150,000 after 5years. Determine the depreciation deduction and the resultingunrecovered investment during each year of the asset’s life.Click here to access the MACRS-GDS Table Calculator

Part a

Determine the depreciation deduction and the resultingunrecovered investment during each year of the asset’s life usingdeclining balance depreciation using double declining balancedepreciation.

EOY Depreciation enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a total amount

Round entry to 0 decimal places. The tolerance is±10.

A surface mount PCBplacement/soldering line is to be installed for \$1,300,000. It willhave a salvage value of \$150,000 after 5 years. Determine thedepreciation deduction and the resulting unrecovered investmentduring each year of the asset’s life.

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Parta

Determinethe depreciation deduction and the resulting unrecovered investmentduring each year of the asset’s life using declining balancedepreciation using double declining balancedepreciation.

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 EOY Depreciation Balance 0 0 1300000 1 520000 780000 2 312000 468000 3 187200 280800 4 112320 168480 5 18480 150000 1150000

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Cost = \$1300000

Salvage value = 150000

Useful life = 5 years

Method = double decline method

double decline percentage =straight line % * 2

straight line % = 100 / 5 =20%

double decline percentage = 20 * 2= 40%

1st  year end = 1300000 * 40% =520000

2nd year= 780000 * 40% = 312000

3rd year= 468000 * 40% = 187200

4th year= 280800 * 40% = 112320

5th year= 168480 – 150000 = 18480

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Double decline balancemethod:

Under this method we used adepreciation rate that is two time the percent that would recognizeunder straight line dep. Method.

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Salvage value is not taken in to account whencalculating the annual dep. Charge.However near the end of the assets useful life, we need to pay theattention on the salvage value to make certain that we don’tdepreciate assets below its salvage value.

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