Straight-line method and double-declining-balance method

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Reference no: EM13796424

Upjohn Company purchased new packaging equipment with an estimated useful life of five years. The cost of the equipment was $35,000 and the salvage value was estimated to be $5,000 at the end of year 5. Determine the annual depreciation amount and resulting end-of-the-year Book Value for each year of the 5-year life of the equipment for each of the following methods of depreciation:

A) Straight-line method.

B) Double-declining-balance method (Limit the depreciation expenses in the fifth year to an amount that will cause the book value of the equipment at year-end to equal the $5,000 estimated salvage value.) Note: A cash flow diagram is not required.

Reference no: EM13796424

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