Straight-Line Depreciation A refrigerator used by a wholesale warehouse has a cost of $105,200, an estimated residual value of $6,200, and an estimated useful life of 10 years. What is the amount of the annual depreciation computed by the straight-line method?

Depreciation by Two Methods A storage tank acquired at the beginning of the fiscal year at a cost of $129,600 has an estimated residual value of $7,500 and an estimated useful life of 25 years. a. Determine the amount of annual depreciation by the straight-line method. b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your answers to the nearest dollar. Depreciation Year 1 Year 2

Modified Accelerated Cost Recovery System An example of a depreciation schedule under the Modified Accelerated Cost Recovery System of depreciation is shown. The Internal Revenue Service (IRS) classifies various assets according to useful life and sets depreciation rates for each year of the asset’s life. This asset has a five year life. The MACRS rates are shown in the schedule. This example is for an asset with a cost of $40,000 and a salvage value of $4,000.     MODIFIED ACCELERATED COST RECOVERY SYSTEM Year Cost × Rate = DepreciationExpense AccumulatedDepreciation(End of Year) Book Value(End of Year) 1 $40,000   20.00%   $8,000     $8,000     $32,000     2 40,000   32.00%   12,800     20,800     19,200     3 40,000   19.20%   7,680     28,480     11,520     4 40,000   11.52%   4,608     33,088     6,912     5 40,000   11.52%   4,608     37,696     2,304     6 40,000   5.76%   2,304     40,000     0       Prepare a depreciation schedule showing the depreciation…

Units-of-activity Depreciation A truck acquired at a cost of $515,000 has an estimated residual value of $27,500, has an estimated useful life of 65,000 miles, and was driven 6,500 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost (b) The depreciation rate (c) The units-of-activity depreciation for the year per mile