A plant asset acquired on October 1, 2007, at a cost of
$500,000 has an estimated useful life of 10 years. The salvage value is
estimated to be $50,000 at the end of the asset's useful life. This
company is a calendar year company which needs to be considered in the
calculation of the depreciation expense.

Instructions:

Determine the depreciation expense for the first two years using the:
(a) straight-line method.

(b) double-declining-balance method.

1. SL is Cost - Salvage value / # of years = Depreciation Expense for one year.

First year is a partial year so take your Expense per year * 3/12 to get the correct amount

2. DDB = Book Value *(1/10 *2) or 20%

1st year is a partial year so take your Cost * 20% * 3/12 = Depreciation Expense for the year.

2nd year = (Cost - Depreciation Expense 1st year) * 20%