Deluxe Ezra Company purchases equipment on January 1, 2017, at a cost of $469,000. The asset is
Question:
Deluxe Ezra Company purchases equipment on January 1, 2017, at a cost of $469,000. The asset is expected to have a service life of 12 years and a salvage value of $40,000.
Instructions:
a) Compute the amount of depreciation for each of 2017, 2018, and 2019 using the straight-line depreciation method.
b) Compute the amount of depreciation for each of 2017, 2018, and 2019 using the sum-of-the-years' digits method.
c) Compute the amount of depreciation for each of 2017, 2018, and 2019 using the double-declining-balance method. (In performing your calculation, round constant percentage to the nearest one-hundredth and round dollar amounts to the nearest dollar.)
Salvage ValueSalvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy