Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 17

Depreciation calculation methods-partial year Freedom Co. purchased a new machine on July 2, 2016, at a total installed cost of $132,000. The machine has an estimated life of five years and an estimated salvage value of $18,000.
Required:
a. Calculate the depreciation expense for each year of the asset's life using:
1. Straight-line depreciation.
2. Double-declining-balance depreciation.
b. How much depreciation expense should be recorded by Freedom Co. for its fiscal year ended December 31, 2016, under each method? (Note: The machine will have been used for one-half of its first year of life.)c. Calculate the accumulated depreciation and net book value of the machine at December 31, 2017, under each method.