Reference no: EM132623317

Problem 1: Tullahoma Company purchased equipment for $27,500. It depreciated the equipment over a fiveyear life by the double-declining-balance method until the end of the second year, at which time the asset was sold for $8,500. Calculate the gain or loss on the sale at the end of the second year.

Problem 2: On January 2, 2011, Jansing Corporation acquired a new machine with an estimated useful life of five years. The cost of the equipment was $40,000 with a residual value of $5,000.

a. complete depreciation table under the two depreciation methods listed below.

1. Straight-line.

2. 200 percent declining-balance.

3. 150 percent declining-balance with a switch to straight-line when it will maximize depreciation expense.