Suppose the printing department of Geico Insurance acquired a new press for $360,000. The equipment's estimated useful life is 8 years and estimated residual value is $40,000.

Prepare a depreciation schedule similar to Exhibit, comparing straight-line and DDB depreciation. Show all amounts in thousands of dollars (rounded to the nearest tenth). Limit the schedule to the first 3 years of useful life. Show the depreciation for each year and the book value at the end of each year.

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Declining-Balance at Twice the Straight-Line Rate (DDB)T Modified DDB-Depreciation Schedule Adjustment in Year 4 Straight-Line* Book Value $41,000 20,500 10,250 Annual Depreciation Book Value Depreciation Annual Book Value $41,000 20,500 10,250 5,125 2,562 Annual Depreciation $41,000 At acquisition Year 1 Year 2 Year 3 Year 4 Total $10,000 10,000 10,000 10,000 $40,000 31,000 $20,500 21,000 10,250 5,125 2,563 $38,438 $20,500 10,250 5,125 4,125 $40,000 11,000 1,000 5,125 1,000