On January 1, 2008, Ron Shelley purchased a new tractor to use on his farm. The tractor cost $100,000. Ron also had the dealer install a front-end loader on the tractor. The cost of the front-end loader was $7,000. The shipping charges were $600, and the cost to install the loader was $800. The estimated life of the tractor was eight years, and the estimated service-hour life of the tractor was 12,500 hours. Ron estimated that he could sell the tractor for $15,000 at the end of eight years or 12,500 hours. The tractor was used for 1,725 hours in 2011. A full year’s depreciation was taken in 2008, the year of acquisition.

Instructions:

Compute depreciation expense for 2011 under each of the following methods:

1. Straight-line

2. Double-declining-balance

3. Sum-of-the-years’-digits

4. Service-hours