At the beginning of 2014, Metal Manufacturing purchased a new computerized drill press for $75,000. It is

Question:

At the beginning of 2014, Metal Manufacturing purchased a new computerized drill press for $75,000. It is expected to have a five-year life and a $15,000 salvage value.

Required

a. Compute the depreciation for each of the five years, assuming that the company uses

(1) Straight-line depreciation.

(2) Double-declining-balance depreciation.

b. Record the purchase of the drill press and the depreciation expense for the first year under the straight-line and double-declining-balance methods in a financial statements model like the followingone:

At the beginning of 2014, Metal Manufacturing purchased a new

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Salvage Value
Salvage 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...