On July 1, 2020, Yorkton Company purchased for $420,000 equipment having an estimated useful life of...

On July 1, 2020, Yorkton Company purchased for $420,000 equipment having an estimated useful life of five years with an estimated residual value of $20,000. Depreciation is calculated to the nearest month. The company has a December 31 year-end.

Required:
Complete the following schedules: (Amount to be deducted should be indicated by a minus sign.)

Solutions

Expert Solution

*Straight-Line method: In this depreciation method, the division of the cost of the asset is equal during its useful life.

SLM= Cost - Salvage value / Useful Life. = $420,000- 20,000 / 5= $80,000

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*Double-Declining balance method: This is an accelerated depreciation method were depreciation expense with the age of assets. the high depreciation rate is used at the start of the period.

DDBM= SLM * 2

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