| The Golden Broom Cleaning Service acquired new equipment: | |||||||||
| Cost | $118,400 | ||||||||
| Residual (Salvage Value) | $12,800 | ||||||||
| Estimated useful Life | 8 years or 40,000 Units | ||||||||
| Required: | |||||||||
| a. Determine the book value of the asset at the end of the THIRD year if the straight line | |||||||||
| depreciation method is used. | |||||||||
| b. Determine the depreciation expense for the SECONDyear assuming double declining balance | |||||||||
| depreciation method is used. | |||||||||
| c. What would be the depreciation expense for the FIRST year if the units of production | |||||||||
| depreciation method is used and 6,000 units were produced? | |||||||||
| Answers: | Computations | ||||||||
| No partial credit will be awarded unless the details of your computations are provided in the space aove. | |||||||||
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