Exact Photo Service purchased a new color printer at the beginning of Year 1 for $37,290. The printer is expected to have a four-year useful life and a $3.300 salvage value. The expected print production is estimated at $1,771,700 pages. Actual print production for the four years was as follows: 545,900 Year 1 Year 2 481,800 Year 3 384,500 Year 4 387,500 Total 1,799,700 The printer was sold at the end of Year 4 for $3,700. Required: a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $37,290. The printer is expected to have a four-year useful life and a $3.300 salvage value. The expected print production is estimated at $1,771,700 pages. Actual print production for the four years was as follows: 545,900 Year 1 Year 2 481,800 Year 3 384,500 Year 4 387,500 Total 1,799,700 The printer was sold at the end of Year 4 for $3,700. Required: a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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