$8$

Part $5$ of $6$

Required information

CP$9-1($Algo$)$ Computing Acquisition Cost and Recording Depreciation under Three Alternative Methods $[$LO $9-2,$ LO $9-3]$

$[$The following information applies to the questions displayed below.$]$

At the beginning of the year, Tulip Corporation bought machinery, shelving, and a forklift. The machinery initially cost $$26,800$ but had to be overhauled $($at a cost of $$1,440)$ before it could be installed $($at a cost of $$720)$ and finally put into use. The machinery's total life was estimated as $40,000$ hours, with an estimated residual value of $$1,000.$ The machinery was actually used $5,000$ hours in year $1$ and $7,000$ hours in year $2.$ Repair costs were $$380$ in each year.

The shelving cost $$9,450$ and was expected to last $5$ years, with a residual value of $$630.$ The forklift cost $$12,150$ and was expected to last six years, with a residual value of $$2,060.$

CP$9-1($Algo$)$ Part $5$

$5.$ Compute double$-$declining$-$balance depreciation expense for years $1$ and $2$ for the forklift. TIP: Remember that the formula for double$-$declining$-$balance uses cost minus accumulated depreciation $($not residual value$).$