On 1 May 20X2, Express Shipping Company (ESC) paid $21,208,600 for land and a warehouse built on it. An appraisal indicated that the lands fair value was $15,149,000 and the warehouses fair value was $11,361,750. ESC estimated that the warehouse can be used for 6 years and will have a salvage value of $250,500. In trying to decide which depreciation method to use for the warehouse, ESCs management

has requested a depreciation schedule of straight-line and double- declining-balance depreciation methods. The fiscal year-end of ESC is 31 December.

Required:

1. 1 Prepare a depreciation schedule for the warehouse using the straight-line method showing depreciation expense, accumulated depreciation, and asset book value.

2. 2 Prepare a depreciation schedule for the warehouse using the double- declining-balance method showing the calculation of depreciation expense, accumulated depreciation, and asset book value. Round your numbers to the nearest integer.

3. 3 Explain why the units-of-production method is not suitable for recording the depreciation of the warehouse.