At the beginning of 2014, Metal Manufacturing purchased a new computerized drill press for $140,000....
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At the beginning of 2014, Metal Manufacturing purchased a new computerized drill press for $140,000. It is expected to have a five-year life and a $20,000 salvage value.
| Required |
| a. | Compute the depreciation for each of the five years, assuming that the company uses |
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| (1) | Straight-Line depreciation. |
| (2) | Double-Declining-Balance depreciation. (Round your answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.) |
| b. | Record the purchase of the drill press and the depreciation expense for the first year under the straight-line and double-declining-balance methods in a financial statements model like the following one: In the Cash Flow column, use OA to designate an operating activity, IA for an investment activity, FA for a financing activity and NA to indicate the element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.) |
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