At the beginning of 2014, Metal Manufacturing purchased a new computerized drill press for $290,000. It is expected to have a five-year life and a $40,000 salvage value.

References

Section BreakExercise 6-9 Computing and recording straight-line versus double-declining-balance depreciation LO 6-3

7.

value: 6.00 points

Required information

Exercise 6-9 Part a

Required

a.		Compute the depreciation for each of the five years, assuming that the company uses

(1)

Straight-Line depreciation.

(2)

Double-Declining-Balance depreciation. (Round your answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.)

	double declining bal.
year 1
year 2
year 3
year 4
year5

References

eBook & Resources

WorksheetDifficulty: 2 Medium

Exercise 6-9 Part aLearning Objective: 06-03 Explain how different depreciation methods affect financial statements.

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8.

value: 10.00 points

Required information

Exercise 6-9 Part b

b.

Record the purchase of the drill press and the depreciation expense for the first year under the straight-line and double-declining-balance methods in a financial statements model like the following one: In the Cash Flow column, use OA to designate an operating activity, IA for an investment activity, FA for a financing activity and NA to indicate the element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.)