Various Depreciation Methods-First Year
on March 24, 2009 Tastee Ice

question 2

Essay

Various depreciation methods-first year
On March 24, 2009 Tastee Ice Cream Co. purchased equipment costing $140,000, with an estimated life of 5 years and an estimated salvage value of $20,000. Compute the depreciation expense Tastee would recognize on this equipment in 2009, assuming:
$$\begin{array} { | l | l | } \hline \text { (a) Straight-line depreciation using the half-year convention } & \$\_\_\_ \\\hline \text { (b) } 200 \% \text { declining balance with fractional periods } & \\\hline \text { rounded to the nearest full month. } & \$ \_\_\_\\\hline \text { (c) } 150 \% \text {-declining-balance, using the half-year convention } & \$\_\_\_ \\\hline\end{array}$$

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Definitions:

Taxable Income

Income on which tax must be paid; total income minus deductions and exemptions.

Foreign Income Taxes

Taxes levied by a foreign government on income earned within its jurisdiction, which may be creditable or deductible on domestic tax returns.

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Qualified Expenses

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