Question

# Windsor Company purchases equipment on January 1, Year 1, at a cost of \$516,000. The asset...

Windsor Company purchases equipment on January 1, Year 1, at a cost of \$516,000. The asset is expected to have a service life of 12 years and a salvage value of \$46,440.

Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to 0 decimal places, e.g. 5,125.)
 Depreciation for Year 1 \$enter a dollar amount rounded to 0 decimal places \$enter a dollar amount rounded to 0 decimal places \$enter a dollar amount rounded to 0 decimal places
Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years'-digits method.
 Depreciation for Year 1 \$enter a dollar amount \$enter a dollar amount \$enter a dollar amount
Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method. (Round depreciation rate to 2 decimal places, e.g. 15.84%. Round answers to 0 decimal places, e.g. 45,892.)
 Depreciation for Year 1 \$enter a dollar amount rounded to 0 decimal places \$enter a dollar amount rounded to 0 decimal places \$enter a dollar amount rounded to 0 decimal places

Depreciation expense = (Cost - Salvage value)/Useful life

= (516,000-46,440)/12 = 39,130

 Depreciation for year 1 39,130 Depreciation for year 2 39,130 Depreciation for year 3 39,130

Sum of digits = [12*13]/2 = 78

 Depreciation for year 1 (516,000-46,440)*12/78 72,240 Depreciation for year 2 (516,000-46,440)*11/78 66,220 Depreciation for year 3 (516,000-46,440)*10/78 60,200

Double declining rate = 200/Useful life = 200/12 = 16.67%

 Depreciation for year 1 (516,000*16.67%) 86,017 Depreciation for year 2 71,678 Depreciation for year 3 59,729