1-On May 1, 2012, Pinkley Company sells office furniture for $150,000 cash. The office furniture originally cost $375,000 when purchased on January 1, 2005. Depreciation is recorded by the straight-line method over 10 years with a salvage value of $37,500. What depreciation expense should be recorded on this asset in 2012?

2-Eckman Company purchased equipment for $80,000 on January 1, 2011, and will use the double-declining-balance method of depreciation. It is estimated that the equipment will have a 5-year life and a $4,000 salvage value at the end of its useful life. The amount of depreciation expense recognized in the year 2013 will be?

To calculate the depreciation expense, we need to know the original cost, salvage value, and useful life of the asset.

1. For Pinkley Company:
Original Cost: $375,000
Salvage Value: $37,500
Useful Life: 10 years

To calculate annual depreciation expense using the straight-line method, we use the formula:
Depreciation Expense = (Original Cost - Salvage Value) / Useful Life

In this case, the calculation would be:
Depreciation Expense = ($375,000 - $37,500) / 10 = $33,750

Therefore, Pinkley Company should record a depreciation expense of $33,750 on the office furniture in 2012.

2. For Eckman Company:
Original Cost: $80,000
Salvage Value: $4,000
Useful Life: 5 years

To calculate annual depreciation expense using the double-declining-balance method, we use the formula:
Depreciation Expense = (Net Book Value / Useful Life) x 2

In the first year, we use the full cost as the Net Book Value.

Depreciation Expense = ($80,000 / 5) x 2 = $32,000

However, for the subsequent years, we need to calculate the Net Book Value.

Year 2012 Net Book Value = $80,000 - $32,000 = $48,000
Year 2013 Depreciation Expense = ($48,000 / 5) x 2 = $19,200

Therefore, Eckman Company should recognize a depreciation expense of $19,200 in the year 2013 for the equipment.