On July 1, 2016, Nike Company purchased for $2,160,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $90,000. Depreciation is taken for the portion of the year the asset is used.

Instructions

(a) Complete the form below by determining the depreciation expense and year-end book values for 2016 and 2017 using the

1. sum-of-the-years'-digits method.

2. double-declining balance method.

Sum-of-the-Years'-Digits Method 2017 2018

Equipment $2,160,000 $2,160,000

Less: Accumulated Depreciation ______ _______

Year-End Book Value ______ _______

Depreciation Expense for the Year ______ _______

Double-Declining Balance Method

Equipment $2,160,000 $2,160,000

Less: Accumulated Depreciation ______ _______

Year-End Book Value ______ _______

Depreciation Expense for the Year ______ _______

(b) Assume the company had used straight-line depreciation during 2016 and 2017. During 2018, the company determined that the equipment would be useful to the company for only one more year beyond 2018. Salvage value is estimated at $120,000.

(1) Compute the amount of depreciation expense for the 2018 income statement.

Please show all calculations in Excel. With formula shown.