Koffman's Warehouse purchased a forklift on January 1, 2017, for $500,000. The forklift is expected to last for five years and have a residual value of $11,000. 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 9e987403505efec_1			$fill in the blank 9e987403505efec_2			$fill in the blank 9e987403505efec_3
2018	fill in the blank 9e987403505efec_4			fill in the blank 9e987403505efec_5			fill in the blank 9e987403505efec_6
2019	fill in the blank 9e987403505efec_7			fill in the blank 9e987403505efec_8			fill in the blank 9e987403505efec_9
2020	fill in the blank 9e987403505efec_10			fill in the blank 9e987403505efec_11			fill in the blank 9e987403505efec_12
2021	fill in the blank 9e987403505efec_13			fill in the blank 9e987403505efec_14			fill in the blank 9e987403505efec_15

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

Activity	operating or investing or financing
Accounts
Statement(s)

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

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3. Refer to Exhibit 8-2.

What factors may have influenced Koffmans to use the double-declining-balance method?

Koffman's may believe that the double-declining-balance method __________ with the revenues produced by the asset. Koffmans may also choose this method because it allows ___________ depreciation to be taken in the early years of the asset life and thus _________ taxes until the later years.