Two methods a kubota tractor acquired on january 8 at a cost of $270,000 has an estimated useful life of ten years. assuming that it will have no residual value. a. determine the depreciation for each of the first two years by the straight-line method. b. determine the depreciation for each of the first two years by the double-declining-balance method. do not round the double-declining balance rate. if required, round your final answer to the nearest dollar.

a. $27,000

b. $54,000 and $43,200

Explanation:

The calculation of the depreciation expense for the two years are presented below:

a) Straight-line method:

= (Acquired value of tractor - residual value) ÷ (estimated useful life)

= ($270,000 - $0) ÷ (10 years)

= ($270,000) ÷ (10 years)  

= $27,000

In this method, the depreciation is same for all the remaining useful life

(b) Double-declining balance method:

First we have to find the depreciation rate which is shown below:

= One ÷ estimated useful life

= 1 ÷ 10

= 10%

Now the rate is double So, 20%

In year 1, the original cost is $270,000, so the depreciation is $54,000 after applying the 40% depreciation rate

And, in year 2, the depreciation expense would be

= ($270,000 - $54,000) × 20%

= $216,000  × 20%

= $43,200

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

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