John Marshal Enterprises pays $235,200 for equipment that will last five years and have a $52,500...

John Marshal Enterprises pays $235,200 for equipment that will last five years and have a $52,500 salvage value. By using the equipment in its operations for five years, the company expects to earn $85,500 annually, after deducting all expenses except depreciation.

Required:

What are depreciation expense, accumulated depreciation, and net (pretax) income, for the 3rd year assuming straight-line depreciation method adopted. Please show your calculation.
What are depreciation expense, accumulated depreciation, and net (pretax) income, for the 3rd year assuming double-decline depreciation method adopted. Please show your calculation.

Expert Solution

ekkarill92 answered 2 years ago

New equipment costs $675,000 and is expected to last for five years with no salvage value....

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