At the beginning of 2012, Precision Manufacturing purchased a new computerized drill press for $50,000. It is expected to have a five-year life and a $5,000 salvage value.
a. Compute the depreciation for each of the five years, assuming that the company uses
(1)Straight-line depreciation.
(2)Double-declining-balance depreciation.
b. Record the purchase of the drill press and the depreciation expense for the first year under the straight-line and double-declining-balance methods in a financial statement.