Typewritten answers only, please. No handwritten answers. At the beginning of 20

Question

Typewritten answers only, please. No handwritten answers.

At the beginning of 2018, Copeland Drugstore purchased a new computer system for $260,000. It is expected to have a five-year life and a $40,000 salvage value.

Compute the depreciation for each of the five years, assuming that the company uses

(1) Straight-line depreciation.

Double-declining-balance depreciation. (Leave no cells blank - be certain to enter "0" wherever required.)

Typewritten answers only, please. No handwritten answers.

Double-Declining Balance Year 1    Year 2 Year 3 Year 4 Year 5

Explanation / Answer

1) Straight line depreciation = (260000-40000/5) = 44000 per year

2) Double declining balance depreciation

Dep Rate = 100/5*2 = 40%

Double-Declining Balance Year 1 260000*40% = 104000 Year 2 260000*60%*40% = 62400 year 3 260000*60%*60%*40% = 37440 Year 4 16160 Year 5 0

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