Assume the same information as in RE11-2, except that Akron Incorporated purchased the asset on September 1, Year 1, instead of January 1, Year 1. Calculate the depreciation for Year 1 and Year 2 using the sum-of-the-years’-digits method.
In exercise
Akron Incorporated purchased an asset at the beginning of Year 1 for $ 375,000. The estimated residual value is $ 15,000. Akron estimates that the asset has a service life of 5 years.