Question: Indigo Company purchases equipment on January 1, Year 1, at a cost of $501,830. The asset is expected to have a service life of 12 years and a salvage value of $42,800.
a) Compute the amount of depreciation for Years 1,2 and 3 using the straight-line depreciation method.
b) Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years'-digits method.
c) Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method.