Depreciation by Two Methods

A John Deere tractor acquired on January 7 at a cost of $240,000 has an estimated useful life of 40 years. Assume that it will have no residual value.

a. Determine the depreciation for each of the first two years by the straight-line method.

	Depreciation
First year	$
Second year	$

b. Determine the depreciation for each of the first two years by the double-declining-balance method.

Depreciation

First year

$

Second year

Depreciation by Two Methods

A storage tank acquired at the beginning of the fiscal year at a cost of $210,000 has an estimated residual value of $30,000 and an estimated useful life of 20 years.

a. Determine the amount of annual depreciation by the straight-line method. $

b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method.

Depreciation

Year 1

$

Year 2

Recording Amortization

Quantum Technologies Company acquired patent rights on January 6, 20Y5, for $1,350,000. The patent has a useful life of 10 years. On January 7, 20Y8, Quantum Technologies successfully defended the patent in a lawsuit at a cost of $199,500.

a. Determine the patent amortization expense for the current year ended December 31, 20Y8. $

Depreciation by Two Methods; Partial Years

Knife Edge Company purchased tool sharpening equipment on July 1, 20Y5, for $16,200. The equipment was expected to have a useful life of three years and a residual value of $900.

Instructions:

a. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the straight-line method.

	Depreciation Expense
20Y5	$
20Y6	$
20Y7	$
20Y8	$

b. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the double-declining-balance method. Round the double-declining-balance depreciation rate to six decimal places and round your final answers to the nearest whole dollar.

	Depreciation Expense
20Y5	$
20Y6	$
20Y7	$
20Y8	$