Penny Corp. purchased a new car on March 1, 2016 for $25,000. The estimated useful life of the car was five years or 500,000 kms. Estimated residual value was $5,000. The car was driven 120,000 kms. in 2016 and 150,000 kms. in 2017.
Required: Calculate the depreciation for 2016 and 2017 using
1. The straight-line method
2. Usage method (kms.)
3. Double-declining balance method.
Assume where applicable that the company uses the ½ year rule to calculate depreciation expense in the year of acquisition and disposal.