At the beginning of 2012, Precision Manufacturing purchased a new computerized drill press for $50,000, it is expected to have a five-year life and a $5000.00 salvage value.
a. Compute the depreciation for each of the five years, assuming that the company uses
(1) Straight Line depreciation
(2) Double decline balance depreciation
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 statement like the one below© BrainMass Inc. brainmass.com October 2, 2020, 2:26 am ad1c9bdddf
Solution is provided in a separate Excel file attached. It contains following parts.
1 1 Calculation of annual deprecition under Straight line Method
2 Calculation of rate of Depreciation under Double Declining Balance Metod:
This solution helps with questions regarding computing depreciation and recording the purchases of a drill.