Question

The ABC Co. purchased a piece of equipment for its factory for the price of $990,000. The Company paid an additional $7,000 in transportation expenses to transport the equipment to its factory and an additional $28,000 to install the equipment in its assembly line. The equipment was estimated to have a useful life of 5 years and a salvage value at the end of the 5 years of $90,000.

REQUIRED: Complete the depreciation tables below to show the the annual depreciation expense over the life of the equipment, the accumulated depreciation on the equipment at the end of each year, and its book value at the end of each year, using:

A. The straight-line method of depreciation; and

B. The double-declining method of depreciation.

A. Straight-line method:
	Year	Depreciation Expense	Accumulated Depreciation	Book Value
	Cost
	1
	2
	3
	4
	5
B. Double-declining method:
	Year	Depreciation Expense	Accumulated Depreciation	Book Value
	Cost
	1
	2
	3
	4
	5

Answer 1