Question

# Case E. Matson Company purchased the following on January 1, 2016:      • Office equipment at...

Case E. Matson Company purchased the following on January 1, 2016:

• Office equipment at a cost of \$42,000 with an estimated useful life to the company of three years and a residual value of \$12,600. The company uses the double-declining-balance method of depreciation for the equipment.

• Factory equipment at an invoice price of \$806,800 plus shipping costs of \$22,000. The equipment has an estimated useful life of 112,000 hours and no residual value. The company uses the units-of-production method of depreciation for the equipment.

• A patent at a cost of \$360,000 with an estimated useful life of 10 years. The company uses the straight-line method of amortization for intangible assets with no residual value.

The company's year ends on December 31.

1-a. Prepare a partial depreciation schedule of office equipment for 2016, 2017, and 2018. (Do not round intermediate calculations.)

(I just need the 2016,2017 and 2018 depreciation expense, accumulated depreciation, and netbook value)

1-a)

Straight line depreciation = (Book value -Salvage value) / (Lifetime

= (42000-12600)/3

=9800

Straight line depreciation rate = Straight line depreciation*100/(Book value -Salvage value)

=33.333%

Depreciation under double-declining-balance method = 2* Straight line depreciation rate* Book value

 Year Beginning book value Depreciation percent Depreciation amount Accumulated depreciation amount Ending book Value 2016 42000 66.67% 28000 28000 14000 2017 14000 10.00% 1400 29400 12600 2018 12600 0.00% 0 29400 12600

Accumulated depreciation = 29400

Last year book value = salvage value = 12600

Depreciation amount:

2016: \$ 28000

2017:\$ 1400

2018:\$ 0

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