Assignment
1. A company purchased a truck on October 1 of the current year at a cost of $40,000. The truck is expected to last six years and has a salvage value of $2,200.
The company's annual accounting period ends on December 31.
a. What is the depreciation expense for the current year, assuming the straight-line method is used?
b. What is the depreciation expense for the current year, assuming the double-decliningbalance method is used?
2. A machine was purchased for $37,000 and depreciated for five years on a straight-line basis under the assumption it would have a ten-year life and a $1,000 salvage value.
At the beginning of the machine's sixth year it was recognized the machine had three years of remaining life instead of five and that at the end of the remaining three years its salvage value would be $1,600. What amount of depreciation should be recorded in each of the machine's remaining three years?