Slope Style Snowboarding Company, a public company, purchased equipment on January 10, 2020, for $750,000. At that time, management estimated that the equipment would have a useful life of 10 years and a residual value of $50,000. Slope Style uses the straight-line method of depreciation and has a December 31 year end. Slope Style tested the equipment for impairment on December 31, 2024, after recording the annual depreciation expense. It was determined that the equipment’s recoverable amount was $320,000, and that the total estimated useful life would be eight years instead of 10, with a residual value of $10,000 instead of $50,000. 

Instructions 

a. Calculate the annual depreciation expense for the years 2020 to 2024 and the carrying amount at December 31, 2024. 

b. Record the impairment loss, if any, on December 31, 2024. 

c. What will appear on Slope Style’s 2024 income statement and balance sheet with regard to this equipment? 

d. Assuming no further impairments or recoveries, calculate the annual depreciation expense for the years 2025 to 2027. Round the percentage rate to two decimal places.