1) Hartman Manufacturing acquired a vehicle on January 1, 20X2, for $90,000.

The machine is estimated to

have a 8-year life, with a residual value of $10,000. Hartman Manufacturing is not certain whether to use the
straight-line or double-declining-balance method of depreciation.
Prepare the following depreciation schedule:

Straight-Line Double-Declining-Balance
Depreciation Book Depreciation Book
Date Expense Value Expense Value
01/01/2X02 $78,000 $78,000
12/31/2X02
12/31/20X3
12/31/20X4
12/31/20X5
12/31/20X6
12/31/20X7

2) For each of the independent situations below, determine the age of the asset in question. All assets were
acquired at the beginning of the years.
a. The balance in the buildings account is $400,000; while the balance sheet shows the book value of the
buildings at $217,600. The notes to the financial statements indicate that straight-line depreciation is used for
all plant assets and that residual values are estimated at 5% of cost. The estimated life of the buildings is 25
years.
b. The book value of delivery equipment is $51,520. The cost of the delivery equipment was $80,500. The
company uses the straight-line method of depreciation for delivery equipment and estimates life at 5 years or
50,000 units. So far, 27,000 units have been produced. Residual value is 10% of cost.
Answer:

3) On January 1, 2009, Elicir Technologies purchased lawn mowers for $60,000. The lawn mowers have an
estimated life of 8 years or 40,000 hours and an estimated residual value of $4,000. Elicir Technologies must
choose the depreciation method that appropriately allocates depreciation over the lawn mowers' useful life
and would like the following items calculated.
1) Depreciation expense for 2009 and 2010 using the units-of-production depreciation method. The lawn
mowers were operated for 4,000 hours in 2009 and 6,000 hours in 2010.
2) Straight-line depreciation for 2009 and 2010.
3) Accumulated depreciation at December 31, 2010 using the straight-line method
4) Accumulated depreciation at December 31, 2010 using the units-of-production method.
5) Book value of the lawn mowers using the straight-line depreciation method and the book value using the
units-of-production method of depreciation as of December 31, 2010.

4 )Dugger Excavating bought a machine for $24,000 on January 1, 20X3, with a useful life of 5 years and a
salvage value of $4,000. At the beginning of 20X4, Dugger finds the residual value will be zero.
Assume Dugger employs straight-line depreciation. Additionally assume that at the beginning of 20X4
Dugger finds a $200 attachment that extends the life of the equipment 2 years beyond the original estimate.
What will be the depreciation expense in 20X4?
A) $4,800
B) $4,667
C) $3,367
D) $4,000
E) $4,200