South Airlines purchased a 747 aircraft on January 1, 2013, at a cost of $350,000. The estimated useful life of the aircraft is 20 years, with an estimated salvage value of $50,000. On January 1, 2016 the airline revises the total estimated useful life to 12 years with a revised salvage value of $35,000

Instructions

(a) Compute the depreciation and book value at December 31, 2015 using the straight-line method and the double-declining-balance method.

(b) Assuming the straight-line method is used, compute the depreciation expense for the year ended December 31, 2016.