DEPRECIATION COMPUTATIONS

ON JULY 1, 2015 DOLBY CORP PURCHASED SOME NEW EQUIPMENT TO BE USED IN THEIR RECORDING STUDIO. THE EQUIPMENT COST $70,000 AND IT IS EXPECTED TO HAVE A SALVAGE VALUE OF $8,000 AFTER ITS USEFUL LIFE OF 6 YEARS. IT IS ESTIMATED THAT THE MACHINE WILL BE USED FOR 32,000 HOURS OF RECORDING OVER THE 6 YEARS. DOLBY USED THE EQUIPMENT FOR 8,000 HOURS AND 9,000 HOURS FOR THE YEARS 2015 AND 2016 RESPECTIVELY. MACRS (TAX) DEPRECIATION SPECIFIES A FIVE-YEAR RECOVERY PERIOD FOR THIS ASSET. THE IRS TABLE SHOWS THE FOLLOWING PERCENTAGES FOR DEPRECIATION: YEAR PERCENTAGE FIRST 20% SECOND 32% THIRD 19.20% FOURTH 11.52% FIFTH 11.52% SIXTH 5.76% CALCULATE THE DEPRECIATION EXPENSE FOR 2015 AND FOR 2016 USING (a) the straight-line method, (b) the DDB method, (3) the units of activity method, and (4) the MACRS method.