Robert Smith Company purchased a new machine for its assembly process on June 1, 2015. The cost of this machine was $122,000. The company estimated that the machine would have a salvage value of $12,000 at the end of its service life. Its life is estimated at 5 years.
Required: Compute the depreciation expense under the following methods:
Straight-line method
Sum-of-the-years-digits
Double declining balance
Ole Inc. began constructing a building for its own use in January 2015. During 2015 Ole incurred interest of $72,000 on specific construction debt, and $28,800 on other borrowings. Interest computed on the weighted average amount of accumulated expenditures for the building during 2015 was $57,600. What is the amount of interest cost that Ole should capitalize.
Benson Company purchased equipment for $80,000 in 2012. The machinery originally had an estimated life of 10 years and a salvage value of $5,000. Benson used the straight-line depreciation method. In 2016, the estimated life was changed to 8 years.
Required: What is the annual depreciation expense for 2016?