An equipment was purchased at a cost of $33,600 on September 1, 2010. The equipm

Question

An equipment was purchased at a cost of $33,600 on September 1, 2010. The equipment has an estimated residual value of $3,130 and an estimated useful life of five years or 21,600 hours. Assume the equipment was used for 1,060 hours from September 1 to December 31.

Required:
Calculate the amount of depreciation to report during the year ended December 31, using following methods(Round your answers to the nearest dollar amount. Omit the "$" sign in your response):

Straight-line $
Double-declining-balance$

Explanation / Answer

Calculate the amount of depreciation to report during the year ended December 31, using following methods(Round your answers to the nearest dollar amount. Omit the "$" sign in your response): Straight-line $ (33,600 - 3130)/5 = 6094 per year september 1 to december 31 = 4 months 6094*4/12 = $2031 Answer for straight line = $2031 Double-declining-balance$ Straight line rate is 1/5 = .2. Double declining rate is twice straigh line or .2*2 = .4. 33600*.4*(4 months/12 months) = $4480 Answer for double declining balance = $4480

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