Question # 1:

Smart Hardware purchased new shelving for its store on April 1, 2011. The shelving is expected to have a 20-year life and no residual value. The following expenditures were associated with the purchase:

Cost of the shelving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,000

Freight charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520

Sales taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 780

Installation of shelving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,700

Cost to repair shelf damaged during installation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400

Instructions

Compute depreciation expense for the years 2011 through 2016 under each depreciation method listed below:

1. Straight-line, with fractional years rounded to the nearest whole month.

2. 200 percent declining-balance, using the half-year convention.

3. 150 percent declining-balance, using the half-year convention.