A pressurized spray painter was purchased on April 1 of the fiscal year for $3,9

Question

A pressurized spray painter was purchased on April 1 of the fiscal year for $3,900. It has a useful life of 4 years and a residual value of $300.

a. Determine depreciation expense for the first two years, assuming a fiscal year end of December 31 and using the straight-line method.
Year 1 $
Year 2 $

b. Determine depreciation expense for the first two years, assuming a fiscal year end of December 31 and using the double-declining-balance method. Round your answers to two decimal places.
Year 1 $
Year 2 $

Explanation / Answer

(a) Straight line method Depreciation per year = (3900 - 300)/4 = $900 Year 1 Depreciation = $900 x 9/12 = $675 Year 2 Depreciation = $900 (b) Double declining balance method Depreciation rate = (100/4) x 2 = 50% Year 1 Depreciation = 3900 x 50% x 9/12 = $1462.5 Year 2 Depreciation = (3900 - 1462.5) x 50% = $1219 Hope this helps!

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