Computing Depreciation Expense
Equipment costing $290,000, with an expected scrap value of $30,000 and an estimated useful life of 5 years, was purchased on January 1, 2012.
Calculate the depreciation expense for years 2012 to 2016 using: (a) the straight-line method and (b) the double-declining-balance method.
Cost of Equipment	$ 290,000
Salvage Value	$ 30,000
5 year depreciation schedule
Straight-line depreciation	Depreciation Expense	Accumulated Depreciation	Net Book Value (Cost of Asset less Accum. Dep)
2012
2013
2014
2015
2016
Double Declining depreciation [2/5 = 40%]	Depreciation Expense	Accumulated Depreciation	Net Book Value (Cost of Asset less Accum. Dep)	Hint: You do not include salvage value in your calculation	Subsequent Year Depreciation is based off of Net Book value	Do not depreciate asset below cost less salvage value
2012
2013
2014
2015
2016
Which method is typically preferred for:
(a) income tax purposes?
(b) financial reporting purposes?