DEPRECIATION METHODS. Hansen Supermarkets purchased an electronic code-scanning system for one of its stores at a cost of $150,000. Hansen determined that the system had an expected life of 7 years and an expected residual value of

$7,200..

REQUIRED:

1. Determine the amount of depreciation expense for the first and second years of the system’s life, using the straight-line, double declining balance, and sum-of-theyears’-digits methods.

2. The number of items scanned the first and second years was 7,200,000 and 8,150,000, respectively. Compute usage depreciation for both years if the expected life of the system is 50,000,000 items scanned.

3. Prepare a table of book values for all four depreciation methods as of the end of the first and second years of the system’s life.