Question
Kenartha Oil recently paid $494,400 for equipment that will last five years and have a residual value of $121,000. By using the machine in its
Kenartha Oil recently paid $494,400 for equipment that will last five years and have a residual value of $121,000. By using the machine in its operations for five years, the company expects to earn $187,000 annually, after deducting all expenses except depreciation. Complete the schedule below assuming each of (a) straight-line depreciation and (b) double-declining-balance depreciation. (Do not round intermediate calculations. Enter loss amounts with a minus sign.)
(a) Straight-Line Depreciation: Year 1 Year 2 Year 3 Year 4 Year 5 5-Year Totals Profit before depreciation Depreciation expenses Profit (loss)
(b) Double-Declining-Balance Depreciation: Year 1 Year 2 Year 3 Year 4 Year 5 5-Year Totals Profit before depreciation Depreciation expenses Profit (loss)
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