Tory Enterprises pays $254,400 for equipment that will last five years and have a $45,200 salvage value. By using the equipment in its operations for five years, the company expects to earn $90,100 annually, after deducting all expenses except depreciation.

Calculate annual depreciation expenses using double-declining-balance method. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation.

Depreciation Schedule Income Computation Calculate annual depreciation expenses using double-declining-balance method. Year Year 1 Year 2 Year 3 Depreciation for the Period End of Period Beginning of Depreciation Annual Period Book Accumulated Book Value Rate Value Depreciation Depreciation S 254,400 40% 101,760 101.7601 s 152,840 152.640 40% 61,056 162,816 91,584 91,584 40% 30,634 199,450 54,950 54,950 40% Year 4 Year 5 Total 40% S 199,450 Depreciation Schedule Income Computation Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation. (Net loss should be entered with a minus sign.) Year 1 Income Before Depreciation Depreciation Expense 90,100 S 101.760 90,100 61,056 90,100 36,634 90,100 90,100 $ 450,500 s 199,450 Net (Pretax) Income (Loss) S (11.660) 29,044 53,466 Year 2 Year 3 Year 4 Year 5 Totals S 70.850