Cutter Enterprises purchased equipment for $54,000 on January 1, 2016. The equipment is expected to have a five-year life and a residual value of $8,400.
Using the sum-of-the-years'-digits method, depreciation for 2016 and book value at December 31, 2016, would be
Also if Cutter Enterprises purchased equipment for $87,000 on January 1, 2016. The equipment is expected to have a five-year life and a residual value of $4,500.
Using the double-declining balance method, depreciation for 2016 and the book value at December 31, 2016, would be