Exon Company purchased equipment for $120,000 on January 1, 2018. The equipment has an estimated residual value of $10,000 and an estimated useful life of 10 years. The company depreciates the equipment using the double declining balance method. On January 1, 2021, the company determines that the total useful life is 8 years and the estimated residual value is $3,000. Required: 1. The equipment's book value at January 1, 2021 is $ Round your final answer to the nearest dollar. 2. The annual depreciation expense for 2021 is $ Round your final answer to the nearest dollar.
Exon Company purchased equipment for $120,000 on January 1, 2018. The equipment has an estimated residual value of $10,000 and an estimated useful life of 10 years. The company depreciates the equipment using the double declining balance method. On January 1, 2021, the company determines that the total useful life is 8 years and the estimated residual value is $3,000. Required: 1. The equipment's book value at January 1, 2021 is $ Round your final answer to the nearest dollar. 2. The annual depreciation expense for 2021 is $ Round your final answer to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Exercise: Depreciation Calculation Using Double Declining Balance Method**
**Problem Statement:**
Exon Company purchased equipment for $120,000 on January 1, 2018. The equipment has an estimated residual value of $10,000 and an estimated useful life of 10 years. The company depreciates the equipment using the double declining balance method. On January 1, 2021, the company determines that the total useful life is 8 years and the estimated residual value is $3,000.
**Required:**
1. **Calculate the equipment's book value at January 1, 2021.**
- Round your final answer to the nearest dollar.
2. **Determine the annual depreciation expense for 2021.**
- Round your final answer to the nearest dollar.
*Note: The exercise does not include any graphs or diagrams.*
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