Textbook Problem

STRAIGHT-LINE, DECLINING-BALANCE, SUM-OF-THE-YEARS’-DIGITS, AND MACRS METHODS A machine is purchased January 1 at a cost of $59,000. It is expected to serve for eight years and have a salvage value of $3,000.

REQUIRED

1. 1. Prepare a schedule showing depreciation for each of the eight years and the book value at the end of each year using the following methods:
   1. (a) Straight-line
   2. (b) Double-declining-balance (round to two decimal places)
   3. (c) Sum-of-the-years'-digits (round to two decimal places)
2. 2. Assuming a seven-year class of property, compute MACRS depreciation expense for each year of the asset’s life.