At the beginning of Year 1, Copeland Drugstore purchased a new computer system for $180,000. It is expected to have a five-year life and a $30,000 salvage value.

Required

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

(1) Straight-line depreciation.

(2) Double-declining-balance depreciation.

Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double-declining-balance methods in a financial statements model.

(1)

	Straight-line Depreciation
Year 1
Year 2
Year 3
Year 4
Year 5

	Double-Declining Balance
Year 1
Year 2
Year 3
Year 4
Year 5

(2)

COPELAND DRUGSTORE
Horizontal Statements Model
Balance Sheet					Income Statement					Statement of Cash Flows
Assets			=	Stockholders Equity	Revenue		Expenses	=	Net Income
Cash	+	Book Value of Computer System		Retained Earnings
Purchase of computer system
	+		=					=
Straight-Line Depreciation
	+		=					=
Double-Declining-Balance Depreciation
	+		=					=