Computing StraightLine and DoubleDecliningBalance Depreciation
On January 2, Haskins Company purchases a laser cutting machine for use in fabrication of a part for one of its key products. The machine cost $90,000, and its estimated useful life is five years, after which the expected salvage value is $5,000. For both parts (a) and (b) below: (1) Compute depreciation expense for each year of the machine’s fiveyear useful life under that depreciation method. (2) Use the financial statements effects template to show the effect of depreciation for the first year only for that method.
(a) Straightline
$Answer 17000 per year
Use negative signs with answers below, when appropriate.
Balance Sheet  
Transaction  Cash Asset  +  Noncash
Assets 
=  Liabilities  +  Contributed
Capital 
+  Earned
Capital 

Record first year depreciation  Answer 0  Answer 17000  Answer 0  Answer 0  Answer 17000 
Income Statement  
Revenue 
– 
Expenses 
= 
Net
Income 

Answer 0  Answer 17000  Answer 17000 
(b) Doubledeclining
Year  Depreciation Expense 
1  $Answer 36000 
2  $Answer 21600

3  $ Answer 12960

4  $Answer 7776

5  $Answer 6664

Use negative signs with answers below, when appropriate.
Balance Sheet  
Transaction  Cash Asset  +  Noncash
Assets 
=  Liabilities  +  Contributed
Capital 
+  Earned
Capital 

Record first year depreciation  Answer 0

Answer 36000

Answer 0

Answer 0

Answer 36000

Income Statement  
Revenue 
– 
Expenses 
=  Net
Income 

Answer 0

Answer 36000

Answer 36000
