Nichols Company Purchased a New Machine for $250,000

question 61

Essay

Nichols Company purchased a new machine for $250,000. It is estimated that the machine will have a $25,000 salvage value at the end of its 5-year useful service life. The double-declining-balance method of depreciation will be used.
Instructions
Prepare a depreciation schedule that shows the annual depreciation expense on the machine for its 5-year life.

---

Definitions:

Subsidiary Ledgers

Detailed ledgers that contain information about specific accounts, supporting the balances recorded in the general ledger.

Factory Overhead

The umbrella of indirect production expenses, including costs related to operating the factory that are not directly tied to a specific product or production volume.

Manufacturing Process

A series of steps that are followed to convert raw materials into finished products.

Principal Products

The main or most significant products manufactured or offered by a company, often the primary source of its revenue.