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. Note: 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 Double declining balance
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. Note: 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 Double declining balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Note: Round your per unit depreciation to 2 decimal places.
Complete this question by entering your answers in the tabs below.
Double
declining
balance
Compute depreciation for each year (and total depreciation of all years combined) for the machine under the Double-
declining-balance.
Straight Line
Year
Year 1
Year 2
Year 3
Year 4
Total
Units of
Production.
Double-declining-balance Depreciation for the
Period
Beginning of Depreciation Depreciation
Period Book
Rate
Expense
Value
$
257,500
%
%
%
**
%
$
0
< Units of Production
End of Period
Accumulated
Depreciation
Book Value
$ 257,500
Druble declining balance
20
YAN
WING
M
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