Brough Oil Company, which prepares financial statements on a calendar-year basis, purchased new drilling equipment on July 1, 2012. A breakdown of the cost follows:

Cost of drilling equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $125,000

Cost of cement platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000

Installation charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000

Freight costs for drilling equipment. . . . . . . . . . . . . . . . . . . . . . . . . 3,000

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $185,000

Assuming that the estimated life of the drilling equipment is 20 years and its salvage value is $10,000:

1. Record the purchase on July 1, 2012.

2. Assume that the drilling equipment was recorded at a total cost of $140,000. Calculate the depreciation expense for 2012 using the following methods:

a. Sum-of-the-years’-digits

b. Double-declining-balance

c. 150% declining-balance

3. Prepare the journal entry to record the depreciation for 2012 in accordance with part (2a).