1. Calculate the annual depreciation expenses using the three methods for a new combine that costs $128,000 with a life expectancy of 7 years and a salvage value of $9,000.
2. Straight-Line Depreciation (SL) (10 points)

Year	Beginning Book Value	Depreciation Rate	Depreciation Expense	Ending Book Value
1
2
3
4
5
6
7

1. Sum-of-the-Years-Digits Depreciation (SYD) (10 points)

Year	Beginning Book Value	Depreciation Rate	Depreciation Expense	Ending Book Value
1
2
3
4
5
6
7

1. Double Declining Balance Depreciation (DDB) (10 points)

Year	Beginning Book Value	Depreciation Rate	Depreciation Expense	Ending Book Value
1
2
3
4
5
6
7

2. Indicate the effects of the following transactions on the assets, liabilities, and net worth.

(10 points)

Item			Assets			Liabilities			Net Worth
			Debits (+)	Credits (-)		Debits (-)	Credits (+)		Debits (-)	Credits (+)
Sold Crop ($50,000) ($36,000 from inventory)
Paid Real Estate Loan ($25,000 principal)
($1,200 interest accrued)
Made Off-Farm Income and Invested into the Farm ($1,000)
Produced Grain and Placed in Inventory ($10,000)
Incurred Annual Depreciation Expense ($5,200)