Depreciation Methods

Sorter Company purchased equipment for $100,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of $10,000.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Required:

Compute the depreciation expense for 2019 under each of the following methods:

1. Straight-line: $ fill in the blank 2
2. Sum-of-the-years'-digits: $ fill in the blank 3
3. Double-declining-balance: $ fill in the blank 4
4. Depreciation causes the book value of the assets to decrease each period. When an accelerated depreciation method is used, the rate of return increases each period.