Cosby Company purchased a new plant asset on April 1, 2012, at a cost of $774,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Cosby’s accounting period is the calendar year.
Instructions
(a) Compute the depreciation for this asset for 2012 and 2013 using the sum-of-the- ears digits method.
(b) Compute the depreciation for this asset for 2012 and 2013 using the double-declining-balance method.