A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in Year 1, 124,600 in Year 2, 121,800 in Year 3, and 15,200 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.) Complete this question by entering your answers in the tabs below. Straight Line Units of Production DDB Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation.

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Chapter1: Financial Statements And Business Decisions
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A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on
January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the
following units: 220,000 in Year 1, 124,600 in Year 2, 121,800 in Year 3, and 15,200 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.)
Complete this question by entering your answers in the tabs below.
Straight Line
Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line
depreciation.
Straight-Line Depreciation
Depreciation
Expense
Year
Year 1
Year 2
Year 3
Units of
Production
Year 4
Total
$
0
DDB
Straight Line
Units of Production
Transcribed Image Text:A machine costing $257,500 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 475,000 units of product during its life. It actually produces the following units: 220,000 in Year 1, 124,600 in Year 2, 121,800 in Year 3, and 15,200 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.) Complete this question by entering your answers in the tabs below. Straight Line Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Straight-line depreciation. Straight-Line Depreciation Depreciation Expense Year Year 1 Year 2 Year 3 Units of Production Year 4 Total $ 0 DDB Straight Line Units of Production
Straight Line
Year
Year 1
Year 2
Year 3
Year 4
Total
Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of
production.
Straight Line
Year
Units of
Production
Year 1
Year 2
Year 3
Year 4
Total
-~-
Units
220,000
124,600
121,800
15,200
Units of
Production
DDB
Units of Production
Depreciable
Units
Beginning of
Period Book
Value
DDB
Depreciation
per unit
Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double-
declining-balance.
DDB Depreciation for the Period
< Straight Line
%
%
%
%
Depreciation Depreciation
Rate
Expense
Depreciation
Expense
$
0
$
0
Accumulated
Depreciation
< Units of Production
DDB >
End of Period
Book Value
$
0
DDB >
Transcribed Image Text:Straight Line Year Year 1 Year 2 Year 3 Year 4 Total Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Units of production. Straight Line Year Units of Production Year 1 Year 2 Year 3 Year 4 Total -~- Units 220,000 124,600 121,800 15,200 Units of Production DDB Units of Production Depreciable Units Beginning of Period Book Value DDB Depreciation per unit Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double- declining-balance. DDB Depreciation for the Period < Straight Line % % % % Depreciation Depreciation Rate Expense Depreciation Expense $ 0 $ 0 Accumulated Depreciation < Units of Production DDB > End of Period Book Value $ 0 DDB >
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