Asphalt Inc. lays asphalt in parking lots and roadways. This year they were awar

Question

Asphalt Inc. lays asphalt in parking lots and roadways. This year they were awarded the state roadway contract and decided to purchase new equipment Asphalt purchased a new piece of equipment with a cost of $43,600 and a $6,000 salvage value, and placed it into service on April 1, Year 1. The equipment was installed at an additional cost of $3,400. The estimated life of the equipment is 8 years. Year 1 Year 2 1 Depreciation expense using the straight-line method 2 Depreciation expense using the double-declining balance method

Explanation / Answer

1 Straight-line: Year 1 3844 =(43600+3400-6000)/8/12*9 Year 2 5125 =(43600+3400-6000)/8 2 Double declining: Year 1 8813 =(43600+3400)*25%/12*9 Year 2 9547 =(43600+3400-8813)*25% Note: Answers have been rounded off to whole dollars

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