Straight-Line, Declining-Balance, Sum-Of-The-Years'-Digits, and MACRS Methods

A machine is purchased January 1 at a cost of $51,100. It is expected to serve for eight years and have a salvage value of $2,100.

Required:

1. Prepare a schedule showing depreciation for each of the eight years and the book value at the end of each year using the following methods:

a. Straight-line

Straight-Line Method
Year	Annual Depreciation	Ending Book Value
1	$	$
2
3
4
5
6
7
8

b. Double-declining-balance (round to two decimal places)

Double-Declining-Balance Method
Year	Annual Depreciation	Ending Book Value
1	$	$
2
3
4
5
6
7
8

c. Sum-of-the-years'-digits (round to two decimal places)

Sum-Of-The-Years'-Digits Method
Year	Annual Depreciation	Ending Book Value
1	$	$
2
3
4
5
6
7
8

2. Assuming a seven-year class of property, compute MACRS depreciation expense for each year of the assets life.

MACRS method
Year	Original Cost	MACRS Depreciation Rates 7-Year Class of Property	Depreciation Expense
1	$51,100	14.29%	$
2	51,100	24.49%
3	51,100	17.49%
4	51,100	12.49%
5	51,100	8.93%
6	51,100	8.92%
7	51,100	8.93%
8	51,100	4.46%
Total			$