Knife Edge Company purchased tool sharpening equipment on July 1, 2010, for $16,200.

Knife Edge Company purchased tool sharpening equipment on July 1, 2010, for $16,200. The equipment was expected to have a useful life of three years and a residual value of $900.

Instructions:

Determine the amount of depreciation expense for the years ended December 31, 2010, 2011, 2012, 2013 by (a) the straight-line method and (b) the double declining-balance method

 

TUTORIAL PREVIEW

(a) Straight-line method:

Depreciation = ($16,200 – $900)/ 3

          = $5,100 per year.


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