Montana Oil Company, which prepares financial statements on a calendar-year basis, pur- chased new drilling equipment on July 1, 2003. A breakdown of the cost follows: Costiofidrillingiequipmentmiy

a) wa auee eee $ 75,000 Costioticementiplatfonmma seis sean 25,000 Installationechanges) aeasen nearer 13,000 Freight costs for drilling equipment ........ 2,000 Assuming that the estimated life of the drilling equipment is 10 years and its salvage value is $5,000: 1. Record the purchase on July 1, 2003. Assume that the drilling equipment was recorded at a total cost of $95,000. Calculate the depreciation expense for 2003 using the following methods:

a. Sum-of-the-years’-digits.

b. Double-declining-balance.

c. 150% declining-balance. 3. Prepare the journal entry to record the depreciation for 2003 in accordance with 2(a).