On July 1, 2014, Sparks Company purchased for $2,160,000 snow-making equipment having an estimated useful life of 5 years with an estimated residual value of $90,000. Depreciation is taken for the portion of the year the asset is used. Instructions (a) Complete the form below by determining the depreciation expense and year-end book values for 2014 and 2015 using the sum-of-the-years'-digits method. double-declining balance method. Sum-of-the-Years'-Digits Method 2015 1. 2. 2014 Equipment Less: Accumulated Depreciation $2,160,000 $2,160,000 Year-End Book Value Depreciation Expense for the Year Double-Declining Balance Method Equipment Less: Accumulated Depreciation $2,160,000 $2,160,000 Year-End Book Value Depreciation Expense for the Year (b) Assume the company had used straight-line depreciation during 2014 and 2015. During 2016, the company determined that the equipment would be useful to the company for only one more year beyond 2016. Residual value is estimated at $120,000. Compute the amount of depreciation expense for the 2016 income statement.

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Chapter1: Financial Statements And Business Decisions
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ull Orange JO ?
7:13 AM
7%C
Done Homework 2 - Ch11_becd859528...
On July 1, 2014, Sparks Company purchased for
$2,160,000 snow-making equipment having an estimated
useful life of 5 years with an estimated residual value of
$90,000. Depreciation is taken for the portion of the year
the asset is used.
Instructions
(а)
Complete the form below by determining the
depreciation expense and year-end book values for 2014
and 2015 using the
sum-of-the-years'-digits method.
double-declining balance method.
1.
2.
Sum-of-the-Years'-Digits Method
2014
Equipment
Less: Accumulated Depreciation
2015
$2,160,000
$2,160,000
Year-End Book Value
Depreciation Expense for the Year
Double-Declining Balance Method
Equipment
Less: Accumulated Depreciation
$2,160,000
$2,160,000
Year-End Book Value
Depreciation Expense for the Year
(b)
depreciation during 2014 and 2015. During 2016, the
company determined that the equipment would be useful
to the company for only one more year beyond 2016.
Residual value is estimated at $120,000. Compute the
amount of depreciation expense for the 2016 income
Assume the company had used straight-line
statement.
Transcribed Image Text:ull Orange JO ? 7:13 AM 7%C Done Homework 2 - Ch11_becd859528... On July 1, 2014, Sparks Company purchased for $2,160,000 snow-making equipment having an estimated useful life of 5 years with an estimated residual value of $90,000. Depreciation is taken for the portion of the year the asset is used. Instructions (а) Complete the form below by determining the depreciation expense and year-end book values for 2014 and 2015 using the sum-of-the-years'-digits method. double-declining balance method. 1. 2. Sum-of-the-Years'-Digits Method 2014 Equipment Less: Accumulated Depreciation 2015 $2,160,000 $2,160,000 Year-End Book Value Depreciation Expense for the Year Double-Declining Balance Method Equipment Less: Accumulated Depreciation $2,160,000 $2,160,000 Year-End Book Value Depreciation Expense for the Year (b) depreciation during 2014 and 2015. During 2016, the company determined that the equipment would be useful to the company for only one more year beyond 2016. Residual value is estimated at $120,000. Compute the amount of depreciation expense for the 2016 income Assume the company had used straight-line statement.
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