Question

On January 2, 2019, the Hanover Company purchased some office equipment for $24,000. The equipment is expected to have a useful life of five years and a salvage value of $3,000. Prepare a schedule showing the annual depreciation for each of the first three years of the asset's life under the straight-line method, the double-declining-balance method, and the sum-of-the-years'-digits method

Answer 1

	Total Cost		$24,000
	Expected Life (in years)		5
	Salvage Value		$3,000
	Total Depreciation		$21,000
Depreciation Schedule: Straight-Line Method
Year	Rate	Depreciation	Accumulated Depreciation	Book Value
0		$0.00	$0.00	$24,000.00
1	1/5	$4,200	$4,200	$19,800
2	1/5	$4,200	$8,400	$15,600
3	1/5	$4,200	$12,600	$11,400
Double-declining-balance
Year	Rate	Depreciation	Accumulated Depreciation	Book Value
0		$0.00	$0.00	$24,000.00
1	2/5	$9,600	$9,600	$14,400
2	2/5	$5,760	$15,360	$8,640
3	2/5	$3,456	$18,816	$5,184
Sum-of-the-years'-digits
Year	Rate	Depreciation	Accumulated Depreciation	Book Value
0		$0.00	$0.00	$24,000.00
1	1/3	$7,000	$7,000	$17,000
2	4/15	$5,600	$12,600	$11,400
3	1/5	$4,200	$16,800	$7,200