Rocky Point Foundry purchased factory equipment on March 15, 2010. The equipment will be depreciated for financial purposes over its estimated useful life, counting the year of acquisition as a half-year. The company accountant revealed the following information regarding this machine:

Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $110,000

Residual value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $17,000

Estimated useful life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 years

1. What amount should Rocky Point Foundry record for depreciation expense for 2011 using the

(a) Double-declining-balance method and

(b) Sum-of-the-years’- digits method?

2. Assuming the equipment is classified as 8-year property under the modified accelerated cost recovery system (MACRS), what amount should Rocky Point Foundry deduct for depreciation on its tax return in 2011?