Depreciation Expense

Cramer Company purchased machinery for $810,000 on January 1, 2020. The company estimated that the machine would have a salvage value of $67,500 at the end of its service life. Its life is estimated at 5 years.

Instructions:

Compute the depreciation expense for 2020 and 2021 under the following methods. Each of the following should be considered unrelated.

(a) Straight-line.

(b) Sum-of-the-years-digits.

(c) Double-declining balance.