Depreciation for Partial Periods Hathaway Company purchased a copying machine for $8,700 on October 1, 2019. The machine's residual value was $500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.) Straight-line method 2019 $ 2020 $ Sum-of-the-years'-digits method 2019 $ 2020 $ Double-declining-balance method 2019 $ 2020 $ Next Level Which method produces the highest book value at the end of 2020

straight line method

sum of digits method

double declining method

Which method produces the highest book value at the end of 2020?

Explanation:

copying machine purchased October 1, 2019 at $8,700

residual value $500

expected life 5 years

depreciation using straight line method:

depreciation expense per year: ($8,700 - $500) / 5 = $1,640

2019: $1,640 x 3/12 = $410

2020: $1,640

sum of digits method:

depreciation first year = 5/15 x $8,200 = $2,733.33

2019: $2,733.33 x 3/12 = $683.33

2020: $2,733.33 x 9/12 = $2,050

$8,200 x 4/15 x 3/12 = $546.67

total 2020: $2,596.67

double declining balance:

depreciation year 1 = 2 x 20% x $8,700 = $3,480

2019: $3,480 x 3/12 = $870

2020: $3,480 - $870 = $2,610

2 x 20% x ($8,700 - $3,460) x 3/12 = $524

total 2020 = $2,610 + $524 = $3,134

107x106 is the answer