Deluxe Ezra Company purchases equipment on January 1, 2020, at a cost of $469,000. The asset is

Question:

Deluxe Ezra Company purchases equipment on January 1, 2020, at a cost of $469,000. The asset is expected to have a service life of 12 years and a salvage value of $40,000.

Instructions

a. Calculate the amount of depreciation for each of 2020, 2021, and 2022 using the straight-line depreciation method.

b. Calculate the amount of depreciation for each of 2020, 2021, and 2022 using the sum-of-the-years’- digits method. Do not round intermediate calculations and round the final answer to the nearest dollar.

c. Calculate the amount of depreciation for each of 2020, 2021, and 2022 using the double-decliningbalance method. (In performing your calculations, round the constant percentage rate to two decimal places and the final answer to the nearest dollar.)

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...