Question
Exercise 2: Partial-Period Depreciation On April 1, 2017, Dowgun Company purchased a machine for $300,000. The estimated residual value is $60,000 and estimated useful life
Exercise 2: Partial-Period Depreciation
On April 1, 2017, Dowgun Company purchased a machine for $300,000. The estimated residual value is $60,000 and estimated useful life is 5 years. The company has prepared the following depreciation schedules for this asset. Dowguns fiscal year ends on December 31.
| 12-month period | Straight-line | SYD | DDB |
| 4/1/2017 - 3/31/2018 | $48,000 | $80,000 | $120,000 |
| 4/1/2018 - 3/31/2019 | 48,000 | $64,000 | 72,000 |
| 4/1/2019 - 3/31/2020 | 48,000 | $48,000 | 43,200 |
| 4/1/2020 - 3/31/2021 | 48,000 | $32,000 | 4,800 |
| 4/1/2021 - 3/31/2022 | 48,000 | $16,000 | 0 |
| Totals (Acc. Depr.) | $240,000 | $240,000 | $240,000 |
Compute the depreciation expense reported for fiscal years 2017-2022 under each of the following methods.
| Year | Straight-line | SYD | DDB |
| 2017 | |||
| 2018 | |||
| 2019 | |||
| 2020 | |||
| 2021 | |||
| 2022 | |||
| Totals |
f. What amount of depreciation will be included in COGS for 2018?
g. What amount of depreciation will be included in the cost of Copper Inventory at the end of 2018?
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