A.1

Michigan Manufacturing uses the straight-line method of depreciation. A large fork-lift was purchased for $62,500. It has an estimated life of five years and an estimated scrap value of $2,500.

Compute the book value at the end of the first year. $___________

A.2

Apex Electronics uses the straight-line method of depreciation. Electronic equipment costing $112,500 has an estimated life of ten years and an estimated scrap value of $7,250.

Compute the book value at the end of the third year. $___________

A.3

Perry Processing, Inc. uses the units-of-production method of depreciation. A packaging machine costing $108,500 has 40,000 estimated hours of operation and an estimated scrap value of $12,500. It operated 4,200 hours in the first year.

Compute the book value at the end of the first year. $___________

A.4

Cole Camping Company, Inc. uses the double-declining-balance method of depreciation. A piece of equipment costing $37,500 has an estimated life of five years and an estimated scrap value of $2,700.

Compute the book value at the end of the second year. $_________

A.5

A retail store using sum-of-the-years-digits method of depreciation purchased equipment costing $36,000 and put it into use June 1. The equipment is expected to have a useful life of 10 years and an estimated resale value of $2,400.

Compute the book value at the end of the second year. Round depreciation amounts to the nearest dollar.

$____________

A.6

A publisher using the sum-of-the-years-digits method of depreciation purchased office furniture costing $36,000 and put it into use May 1. The furniture is expected to have a useful life of 10 years and an estimated resale value of $2,400.

Compute the book value at the end of the second year. Round depreciation amounts to the nearest dollar. $_____________