Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a...

Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a useful life of 5 years, or 14,000 operating hours, and a residual value of $10,000. Compute the depreciation for the first and second years of use by each of the following methods:
Straight Line Depreciation - Full Year Depreciation
Year	Cost	Accum Depr at Beg of Year	Book Value at Beg of Year		Straight Line Rate		Depr for Year	Book Value at End of Year
1	$360,000.00	$0.00	$360,000.00	x
2	360,000	0	360,000	x
3	360,000	0	360,000	x
4	360,000	0	360,000	x
5	360,000	0	360,000	x
					0%

Units of Output - Full Year Depreciation
Year	Cost	Accum Depr at Beg of Year	Book Value at Beg of Year		Units of Activity	Cost Per Unit	Depr for Year	Book Value at End of Year
1	$360,000.00	$0.00	$360,000.00	x	1,200
2	360,000	0	360,000	x	2,250
3	360,000	0	360,000	x	3,000
4	360,000	0	360,000	x	4,350
5	360,000	0	360,000	x	3,200
					14,000
Double Declining Balance - Full Year Depreciation
Year	Cost	Accum Depr at Beg of Year	Book Value at Beg of Year		Double Declining Balance Rate		Depr for Year	Book Value at End of Year
1	$360,000.00	$0.00	$360,000.00	x
2	360,000	0	360,000	x
3	360,000	0	360,000	x
4	360,000	0	360,000	x
5	360,000	0	360,000	x

Expert Solution

Straight Line Depreciation - Full Year Depreciation
Year	Cost	Accum Depr at Beg of Year	Book Value at Beg of Year		Straight Line Rate		Depr for Year	Book Value at End of Year
1	$360,000.00	$0.00	$360,000.00	x	20%		350000*20% = 70000	360000-70000 = 290000
2	360,000	70000	290000	x	20%		70000	220000
3	360,000	70000	220000	x	20%		70000	150000
4	360,000	70000	150000	x	20%		70000	80000
5	360,000	70000	80000	x	20%		70000	10000
					0%

Units of Output - Full Year Depreciation
Year	Cost	Accum Depr at Beg of Year	Book Value at Beg of Year		Units of Activity	Cost Per Unit	Depr for Year	Book Value at End of Year
1	$360,000.00	$0.00	$360,000.00	x	1,200	25	30000	330000
2	360,000	30000	330000	x	2,250	25	56250	273750
3	360,000	56250	273750	x	3,000	25	75000	198750
4	360,000	75000	198750	x	4,350	25	108750	90000
5	360,000	108750	90000	x	3,200	25	80000	10000
					14,000
Double Declining Balance - Full Year Depreciation
Year	Cost	Accum Depr at Beg of Year	Book Value at Beg of Year		Double Declining Balance Rate		Depr for Year	Book Value at End of Year
1	$360,000.00	$0.00	$360,000.00	x	40%		144000	216000
2	360,000	144000	216000	x	40%		86400	129600
3	360,000	230400	129600	x	40%		51840	77760
4	360,000	282240	77760	x	40%		31104	46656
5	360000	313344	46656	*	40%		36656	10000

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