Question
Becker Office Service purchased a new computer system in 2016 for $40,000. It is expected to have a five-year useful life and a $5,000 salvage
Becker Office Service purchased a new computer system in 2016 for $40,000. It is expected to have a five-year useful life and a $5,000 salvage value. The company expects to use the 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 $15,000. Compute the amount of gain or loss using each depreciation method. |
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