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Accelerated Depreciation

Koffman's Warehouse purchased a forklift on January 1, 2017, for $380,000. The forklift is expected to last for five years and have a residual value of $15,000. Koffman's uses the double-declining-balance method for depreciation.

Required:

1. Calculate the depreciation expense, accumulated depreciation, and book value for each year of the forklift's life. If necessary, round any depreciation calculations to the nearest dollar.

Year	Annual Depreciation			Accumulated Depreciation			Book Value
2017	$fill in the blank f5d969fddfd6060_1			$fill in the blank f5d969fddfd6060_2			$fill in the blank f5d969fddfd6060_3
2018	fill in the blank f5d969fddfd6060_4			fill in the blank f5d969fddfd6060_5			fill in the blank f5d969fddfd6060_6
2019	fill in the blank f5d969fddfd6060_7			fill in the blank f5d969fddfd6060_8			fill in the blank f5d969fddfd6060_9
2020	fill in the blank f5d969fddfd6060_10			fill in the blank f5d969fddfd6060_11			fill in the blank f5d969fddfd6060_12
2021	fill in the blank f5d969fddfd6060_13			fill in the blank f5d969fddfd6060_14			fill in the blank f5d969fddfd6060_15

Feedback

The double-declining-balance (DDB) method calculates depreciation at double the straight-line rate per period on the book value, which is a declining amount. Assets cannot be depreciated below residual value. Straight-line rate (SLR) = 100%/asset useful life. Book value = asset acquisition cost (amount recorded in account) less the accumulated depreciation. Set up T account for accumulated depreciation.

2. Identify and analyze the effect of the transaction for depreciation for 2017.

Activity	OperatingInvestingFinancing
Accounts	Depreciation Expense Increase, Accumulated Depreciation IncreaseDepreciation Expense Increase, Accumulated Depreciation DecreaseDepreciation Expense Decrease, Accumulated Depreciation IncreaseDepreciation Expense Decrease, Accumulated Depreciation Decrease
Statement(s)	Balance SheetIncome StatementBalance Sheet and Income Statement

Feedback

Record depreciation expense by increasing the expense and accumulated depreciation accounts.

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item.

Balance Sheet

Income Statement

Stockholders'

Net

Assets

=

Liabilities

+

Equity

Revenues

Expenses

=

Income

Accumulated DepreciationCashDepreciation ExpenseEquipmentEquipment ExpenseNo Entry

fill in the blank 39f478f98fe803d_2

Accumulated DepreciationCashDepreciation ExpenseNotes PayableEquipment ExpenseNo Entry

fill in the blank 39f478f98fe803d_4

fill in the blank 39f478f98fe803d_5