Final answer:
Using the double-declining-balance method, the depreciation expense for Albany Corporation's equipment in Year 1 is $14,063 after adjusting for the purchase partway through the year.
Step-by-step explanation:
The double-declining-balance method of depreciation results in a Year 1 depreciation expense of $18,750 for the equipment purchased by Albany Corporation. To calculate this, we first need to determine the straight-line depreciation rate which is 1 divided by the useful life of the asset.
Since the equipment has a useful life of 8 years, the straight-line rate is 1/8, or 12.5%. The double-declining rate is twice the straight-line rate, therefore 25%. However, since the equipment was purchased on April 1, only 3/4 of the year's depreciation applies to Year 1. The calculation is as follows: $75,000 (cost) multiplied by 25% (double-declining rate) gives us $18,750. Then, we prorate this amount for the 9 months of use, which results in $14,063 (rounded to the nearest dollar).