Question

2. On January 1, Inglewood Cranes purchased a crane for $314,000. Inglewood expects the crane to remain useful for eight years (1,200,000 lifts) and to have a residual value of $50,000. The company expects the crane to be used for 100,000 lifts the first year. Read the requirements. c. Compute the first-year and second-year depreciation expense on the crane using the double-declining-balance method. Begin by selecting the formula to calculate the company's first-year and second-year depreciation on the crane using the double-declining-balance method. Then enter the amounts and calculate the depreciation for the first year. Finally, enter the amounts and calculate the depreciation for the second year. (Enter "O" for items with a zero value. Do not round the interim calculation. Round depreciation expense to the nearest whole dollar.) Double-declining- balance depreciation x = ) x Yr1 Yr2 ( ( Jox Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

	Cost	-	Residual Value	x	2 x (1/Useful life)	=	Double declining balance depreciation
Year 1	$314,000	-	$0		0.25		$78,500
Year 2	$235,500	-	$0		0.25		$58,875