On January 3, 2011, Hank's Excavating Company purchased a bulldozer for $100,000. In addition to the basic purchase price, the company paid sales tax of $2,000 and freight charges of $6,000. The bulldozer will be used for 36,000 machine hours. Hank estimates that the bulldozer will have a useful life of 5 years and no residual value.
Required:
1. Compute the cost of the asset
2. Compute the depreciation expense for 2011 and 2012 using the:
a. straight-line method
b. units-of-production method assuming the bulldozer was used 5,000 machine hours in 2011 and 20,000 machine hours in 2012.
c. Double-declining balance method.

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The Answer of On January 3, 2011, Hank's Excavating Company purchased a bulldozer for $100,000. In addition to the basic purchase price, the company paid sales tax of $2,000 and freight charges of $6,000. The bulldozer will be used for 36,000 machine hours. Hank estimates that the bulldozer will have a useful life of 5 years and no residual value.
Required:
1. Compute the cost of the asset
2. Compute the depreciation expense for 2011 and 2012 using the:
a. straight-line method
b. units-of-production method assuming the bulldozer was used 5,000 machine hours in 2011 and 20,000 machine hours in 2012.
c. Double-declining balance method.

On January 3, 2011, Hank's Excavating Company Purchased a Bulldozer