Reference no: EM132885607

Problem - Changing Depreciation - Kam Company purchased a machine on January 2, 2019, for $20,000. The machine had an expected life of 8 years and a residual value of $300. The double-declining-balance method of depreciation is used.

Required -

1. Compute the depreciation expense for each year of the asset's life and book value at the end of each year.

2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the asset's life, compute the depreciation expense for each year of the asset's life.

3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the asset's life.