Koffman's Warehouse purchased a forklift on January 1, 2017, for $410,000. The forklift is expected to last for five years and have a residual value of $12,000. Koffman's uses the double-declining-balance method for depreciation.

Required:

Question Content Area

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 d1d670f32073fe3_1			$fill in the blank d1d670f32073fe3_2			$fill in the blank d1d670f32073fe3_3
2018	fill in the blank d1d670f32073fe3_4			fill in the blank d1d670f32073fe3_5			fill in the blank d1d670f32073fe3_6
2019	fill in the blank d1d670f32073fe3_7			fill in the blank d1d670f32073fe3_8			fill in the blank d1d670f32073fe3_9
2020	fill in the blank d1d670f32073fe3_10			fill in the blank d1d670f32073fe3_11			fill in the blank d1d670f32073fe3_12
2021	fill in the blank d1d670f32073fe3_13			fill in the blank d1d670f32073fe3_14			fill in the blank d1d670f32073fe3_15

Question Content Area

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

Question Content Area

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 2642c70d3fcf00e_2

Accumulated DepreciationCashDepreciation ExpenseNotes PayableEquipment ExpenseNo Entry

fill in the blank 2642c70d3fcf00e_4

fill in the blank 2642c70d3fcf00e_5

Accumulated DepreciationCashDepreciation ExpenseNotes PayableEquipment ExpenseNo Entry

fill in the blank 2642c70d3fcf00e_7

Accumulated DepreciationCashDepreciation ExpenseEquipmentEquipment ExpenseNo Entry

fill in the blank 2642c70d3fcf00e_9

fill in the blank 2642c70d3fcf00e_10

Question Content Area

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

best matches the decline in usefulness of the assetit is the easiest to calculate

with the revenues produced by the asset. Koffmans may also choose this method because it allows

lessmore

depreciation to be taken in the early years of the asset life and thus

acceleratesdelays

taxes until the later years.