On January 3, 2014, Jimâs Excavating Company purchased a bulldozer for $160,000.

In addition to the basic purchase price, the company paid sales tax of $8,000 and freight charges of $9,000. The bulldozer will be used for 36,000 machine hours. Jim estimates that the bulldozer will have a useful life of 5 years and no residual value. 

Required:

I. Compute the cost of the asset.

II. Compute the depreciation expense for 2014 and 2015 using the:

i. straight-line method

ii. units-of-production method assuming the bulldozer was used 5,000 machine hours in 2014 and 20,000 machine hours in 2015.

iii. double declining balance method

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