(L.OBJ. 2) Selecting the best depreciation method for tax purposes [15-20 min]
Tumble Gymnastics Cerner paid $120,000 for fitness equipment that is expected to have a 10-year life. The expected residual value is $40,000.
Requirement
1. Select the appropriate depreciation method for income tax purposes. Then determine the extra amount of depreciation that Tumble can deduct by using the selected method, versus straight-line, during the first two years of the equipment’s life.
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