Pier Exports purchases equipment on January 1 at a cost of $150,000. The company estimates that there will be no salvage value and that the equipment will have a useful life of 10 years. The company elects to use the double-declining-balance method for the first three years, after which the company will change to the straight-line method of depreciation for the equipment.

Required a. Compute annual depreciation expense for Year 1 through Year 3. b. Prepare the depreciation entry for the end of Year 4. Note: Round your final answers to the nearest whole number.

a.

Year	Annual depreciation expense
Year 1	Answer
Year 2	Answer
Year 3	Answer

b.

Date	Account Name	Dr.	Cr.
Dec. 31, Year 4	CashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained EarningsPrior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reversal of Impairment LossLoss on ImpairmentLoss on DisposalN/A		Answer
	CashInventoryPropertyBuildingEquipmentAccumulated DepreciationCost of Oil ReserveRetained EarningsPrior Period AdjustmentSalesCost of Goods SoldDepreciation ExpenseExploration ExpenseRepairs ExpenseGain on Reversal of Impairment LossLoss on ImpairmentLoss on DisposalN/A		Answer
	To record depreciation.