A machine costing $213,400 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 491,000 units of product during its life. It actually produces the following units: 121,800 in Year 1, 124,000 in Year 2, 120,100 in Year 3, 135,100 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Straight Line Year Units of Production Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double- declining-balance. Year 1 Year 2 Year 3 Year 4 Total DDB DDB Depreciation for the Period Beginning of Period Book Value Depreciation Depreciation Rate Expense % % % % End of Period Accumulated Depreciation Book Value

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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**Depreciation Calculation Overview:**

A machine costing $213,400 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 491,000 units during its life. It actually produces the following units each year:

- Year 1: 121,800 units
- Year 2: 124,000 units
- Year 3: 120,100 units
- Year 4: 135,100 units

The total number of units produced by the end of Year 4 exceeds the original estimate. The machine cannot be depreciated below its estimated salvage value.

**Required:**

Compute the depreciation for each year (and total depreciation of all years combined) under each depreciation method. Round per-unit depreciation to 2 decimal places and other answers to the nearest whole dollar.

**Depreciation Methods:**

- **Straight Line**
- **Units of Production**
- **Double-Declining Balance (DDB)**

**Double-Declining Balance Depreciation Schedule:**

1. **Year 1:**
   - Beginning Book Value: $213,400
   - Depreciation Rate: __%
   - Depreciation Expense: __
   - Accumulated Depreciation: __
   - End Book Value: __

2. **Year 2:**
   - Beginning Book Value: __
   - Depreciation Rate: __%
   - Depreciation Expense: __
   - Accumulated Depreciation: __
   - End Book Value: __

3. **Year 3:**
   - Beginning Book Value: __
   - Depreciation Rate: __%
   - Depreciation Expense: __
   - Accumulated Depreciation: __
   - End Book Value: __

4. **Year 4:**
   - Beginning Book Value: __
   - Depreciation Rate: __%
   - Depreciation Expense: __
   - Accumulated Depreciation: __
   - End Book Value: __

**Total:**

- Depreciation Expense: __
- Accumulated Depreciation: __

The diagram and table are for entering values to calculate depreciation using the Double-Declining Balance method.
Transcribed Image Text:**Depreciation Calculation Overview:** A machine costing $213,400 with a four-year life and an estimated $17,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 491,000 units during its life. It actually produces the following units each year: - Year 1: 121,800 units - Year 2: 124,000 units - Year 3: 120,100 units - Year 4: 135,100 units The total number of units produced by the end of Year 4 exceeds the original estimate. The machine cannot be depreciated below its estimated salvage value. **Required:** Compute the depreciation for each year (and total depreciation of all years combined) under each depreciation method. Round per-unit depreciation to 2 decimal places and other answers to the nearest whole dollar. **Depreciation Methods:** - **Straight Line** - **Units of Production** - **Double-Declining Balance (DDB)** **Double-Declining Balance Depreciation Schedule:** 1. **Year 1:** - Beginning Book Value: $213,400 - Depreciation Rate: __% - Depreciation Expense: __ - Accumulated Depreciation: __ - End Book Value: __ 2. **Year 2:** - Beginning Book Value: __ - Depreciation Rate: __% - Depreciation Expense: __ - Accumulated Depreciation: __ - End Book Value: __ 3. **Year 3:** - Beginning Book Value: __ - Depreciation Rate: __% - Depreciation Expense: __ - Accumulated Depreciation: __ - End Book Value: __ 4. **Year 4:** - Beginning Book Value: __ - Depreciation Rate: __% - Depreciation Expense: __ - Accumulated Depreciation: __ - End Book Value: __ **Total:** - Depreciation Expense: __ - Accumulated Depreciation: __ The diagram and table are for entering values to calculate depreciation using the Double-Declining Balance method.
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