Depreciation Methods On January 2, 2018, Skyler, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $120,000, and its estimated useful life was four years or 920,000 cuttings, after which it could be sold for $5,000. Required a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar): 1. Straight-line. 2. Double-declining balance. 3. Units-of-production. (Assume annual production in cuttings of 200,000; 350,000; 260,000; and 110,000.) 1. Straight-Line Year Depreciation Expense 2018 Answer 2019 Answer 2020 Answer 2021 Answer 2. Double-declining balance Year Depreciation Expense 2018 Answer 2019 Answer 2020 Answer 2021 Answer 2022 Answer 3. Units of Production Year Depreciation Expense 2018 Answer 2019 Answer 2020 Answer 2021 Answer b. Assume that the machine was purchased on July 1, 2018. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods: 1. Straight-line. 2. Double-declining balance. 1. Straight-Line Year Depreciation Expense 2018 Answer 2019 Answer 2020 Answer 2021 Answer 2022 Answer 2. Double-declining balance (Round answers to the nearest whole number, when appropriate.) Year Depreciation Expense 2018 Answer 2019 Answer 2020 Answer 2021 Answer 2022 Answer
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
On January 2, 2018, Skyler, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $120,000, and its estimated useful life was four years or 920,000 cuttings, after which it could be sold for $5,000.
Required
a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar):
1. Straight-line.
2. Double-declining balance.
3. Units-of-production. (Assume annual production in cuttings of 200,000; 350,000; 260,000; and 110,000.)
1. Straight-Line
Year |
Depreciation Expense |
|---|---|
| 2018 | Answer
|
| 2019 | Answer
|
| 2020 | Answer
|
| 2021 | Answer
|
2. Double-declining balance
Year |
Depreciation Expense |
|---|---|
| 2018 | Answer
|
| 2019 | Answer
|
| 2020 | Answer
|
| 2021 | Answer
|
| 2022 | Answer
|
3. Units of Production
Year |
Depreciation Expense |
|---|---|
| 2018 | Answer
|
| 2019 | Answer
|
| 2020 | Answer
|
| 2021 | Answer
|
b. Assume that the machine was purchased on July 1, 2018. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods:
1. Straight-line.
2. Double-declining balance.
1. Straight-Line
Year |
Depreciation Expense |
|---|---|
| 2018 | Answer
|
| 2019 | Answer
|
| 2020 | Answer
|
| 2021 | Answer
|
| 2022 | Answer
|
2. Double-declining balance (Round answers to the nearest whole number, when appropriate.)
Year |
Depreciation Expense |
|---|---|
| 2018 | Answer
|
| 2019 | Answer
|
| 2020 | Answer
|
| 2021 | Answer
|
| 2022 | Answer
|
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