Homework Gamma Inc. bought new office furniture in the year 2002. The purchase cost was 57,617 dollars and in addition it had to spend 14,316 dollars for installation. The furniture has been in use since March 16th, 2002. Gamma forecasted that in 2017 the office furniture would have a net salvage value of $2500. Using the US Accelerated Depreciation Schedule, estimate the value of depreciation recorded in the accounting books in the year 2006 if the company decided to sell the furniture on May 10th (of 2006). (note: round your answer to the nearest cent and do not include spaces, currency signs, or commas)

The depreciation for 2006 will be $5,411 as per double declining balance method;

Explanation:

Cost of Furniture             $57,617

Installation cost               $14,316

Total cost                         $71,933

The asset purchased in 2002 and will have salvage value of $2,500 in 2017.It means useful life of furniture is 15 years

Depreciation in 1st year as per double decline method=($71,933/15)*2=$9,591

Depreciation in 2003=$62,342*(1/15)*2=$8,312

Depreciation in 2004=$62,342-$8,312=$54,029*1/15*2=$7,203

Depreciation in 2005=$54,029 -$7,203=$46,826*1/15*2=$6,243

Depreciation in 2006=$46,826-$6,243=$40,582*1/15*2=$5,411

answer; i believe the correct answer is (75 years);