**E11-1 (Depreciation Computations—SL, SYD, DDB) **Lansbury Company purchases equipment on January 1, Year 1, at a cost of $518,000 . The asset is expected to have a service life of 12 years and a salvage value of $50,000

**Instructions: **

“(a) Compute the amount of depreciation for each Years 1 through 3 using the straight-line

depreciation method.”

Straight-line method depreciation for each of Years 1 through 3 is computed as:

**“(b) Compute the amount of depreciation for each Years 1 through 3 using the sum-of-years digits
depreciation method.” **

“The sum of 1 through 12 = 1+2+3+4+5+6+7+8+9+10+11+12 =

1+12 + 2+11 + 3+10 + 4+9 + 5+8 + 6+7 =

(1+12) + (2+11) + (3+10) + (4+9) + (5+8) + (6+7) =

(13) + (13) + (13) + (13) + (13) + (13) =

13 X (12/2) =

13 X 6 = 78

the sum of the first year and the last year multiplied by one half of the total number of years.

**Hint:** Since “”Sum-of-Years-Digits”" title contains an “”S”", use salvage value to compute periodic

depreciation expense.”

**(c) Compute the amount of depreciation for each Years 1 through 3 using the double-declining balance method. (In performing your calculations, round constant percentage to the nearest one-hundredth of a point and round answers to the nearest dollar.) **

“**Hint:** Since “”Double-Declining Balance Method”" title does not contain an “”S”", do not use salvage value to compute periodic depreciation expense. However, ensure that book value does not violate salvage value.”