Question

Partial-Year Depreciation

Sandblasting equipment acquired at a cost of $40,000 has an estimated residual value of $8,000 and an estimated useful life of eight years. It was placed into service on April 1 of the current fiscal year, which ends on December 31.

a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method.

	Depreciation
Year 1	$
Year 2	$

b. Determine the depreciation for the current fiscal year and for the following fiscal year by the double-declining-balance method.

	Depreciation
Year 1	$
Year 2	$

Answer 1

A)

B)

Depreciation Year 1 3,000 (40,000-8,000)/8 * 9/12 Year 2 4,000

Depreciation Year 1 7,500 |(40,000*25%*9/12 Year 2 8125 |(40,000-7,500)*25%