Compute depreciation for each year (and total depreciation for all years combined) for the machine under straight-line and units-of-production depreciation methods.
On January 2, Gannon Co. purchases and installs a new machine costing $312,000 with a five-year life and an estimated $28,000 salvage value. Management estimates the machine will produce 1,136,000 units of product during its life. Actual production of units is as follows: year 1: 245,600; year 2: 230,400; year 3: 227,000; year 4: 232,600; and year 5: 211,200. The total number of units produced by the end of year 5 exceeds the original estimate – this difference was not predicted. (The machine must not be
Compute depreciation for each year (and total depreciation for all years combined) for the machine under straight-line and
Note: You do not have to use the area for calculating the units of production. This is just a work area. If you do use it, make sure that your final answers are put into the table with straight-line depreciation.
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