1 Becker Office Service purchased a new computer system on January 1, Year 1, for $34,200. It is expected to have a five-year useful life and a $3,600 salvage value. Becker Office Service expects to use the computer system more extensively in the early years of its life. Required a. Calculate the depreciation expense for each of the five years, assuming the use of straight-line depreciation. b. Calculate the depreciation expense for each of the five years, assuming the use of double-declining-balance depreciation. d. Assume that Becker Office Service sold the computer system at the end of the fourth year for $21,000. Compute the amount of gain or loss using each depreciation method. Complete this question by entering your answers in the tabs below. Required A Required B Re Required A Required B Calculate the depreciation expe (Enter all amounts as positive v Calculate the depreciation amount.) Year Annual Depreciation -2345 Year Annual Depreciation 1 2 3 4 5 Required A Required B Required D Assume that Becker Office Service sold the computer sy of gain or loss using each depreciation method. (Loss ar intermediate calculations. Round the final answers to ne Straight-Line Double-Declining-Balance Amount Effect Delta Machine Company purchased a computerized assembly machine for $82,000 on January 1, Year 1. Delta Machine Company 2 estimated that the machine would have a life of four years and a $14,000 salvage value. Delta Machine Company uses the straight- line method to compute depreciation expense. At the beginning of Year 3, Delta discovered that the machine was quickly becoming obsolete and would have little value at the end of its useful life. Consequently, Delta Machine Company revised the estimated salvage to only $4,000. It did not change the estimated useful life of the machine. Compute the depreciation expense for each of the four years. Years Depreciation Expense Year 1 Year 2 Year 3 Year 4 3 Tower Company owned a service truck that was purchased at the beginning of Year 1 for $39,000. It had an estimated life of three years and an estimated salvage value of $6,000. Tower company uses straight-line depreciation. Its financial condition as of January 1, Year 3, is shown on the first line of the horizontal statements model. In Year 3, Tower Company spent the following amounts on the truck: Jan. 4 Overhauled the engine for $6,700. The estimated life was extended one additional year, and the salvage value was revised to $5,000. July 6 Obtained oil change and transmission service, $320. Aug. 7 Replaced the fan belt and battery, $420. Dec. 31 Purchased gasoline for the year, $8,200. 31 Recognized Year 3 depreciation expense. Required a. Record the Year 3 transactions in a statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA), or net change in cash (NC); leave the cell blank if the Statement of Cash Flows is not affected. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry.) TOWER COMPANY Horizontal Statements Model for Year 3 Balance Sheet Income Statement Assets Stockholders' Equity Statement of Date Cash + BV Truck Stock Common Retained Revenue Earnings Expense Net Income Cash Flow Balance 27,000+ 17,000 15,000+ 29,000 1/4 + = 7/6 1. 8/7 + + 12/31 12/31 Total =