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On January 2, 2019, the Hanover Company purchased some office equipment for $24,000. The equipment is...

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Finance

On January 2, 2019, the Hanover Company purchased some officeequipment for $24,000. The equipment is expected to have a usefullife of five years and a salvage value of $3,000. Prepare aschedule showing the annual depreciation for each of the firstthree years of the asset's life under the straight-line method, thedouble-declining-balance method, and the sum-of-the-years'-digitsmethod

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4.5 Ratings (920 Votes)

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

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Transcribed Image Text

On January 2, 2019, the Hanover Company purchased some officeequipment for $24,000. The equipment is expected to have a usefullife of five years and a salvage value of $3,000. Prepare aschedule showing the annual depreciation for each of the firstthree years of the asset's life under the straight-line method, thedouble-declining-balance method, and the sum-of-the-years'-digitsmethod

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