Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to have a four-year useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows: 390,000 410,000 420,000 300,000 Year 1 Year 2 Year 3 Year 4 Total 1,520,000 The printer was sold at the end of Year 4 for $1,650.
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to have a four-year useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows: 390,000 410,000 420,000 300,000 Year 1 Year 2 Year 3 Year 4 Total 1,520,000 The printer was sold at the end of Year 4 for $1,650.
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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[The following information applies to the questions displayed below.]
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to
have a four-year useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000
pages. Actual print production for the four years was as follows:
Year 1
Year 2
Year 3
390,000
410,000
420,000
300,000
Year 4
Total
1,520,000
The printer was sold at the end of Year 4 for $1,650.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbac5cd56-9885-4a25-8e51-dfc1bb78a29e%2Fbe05a083-4715-45ec-a62f-d5cd6f4811ef%2F1af3u7i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to
have a four-year useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000
pages. Actual print production for the four years was as follows:
Year 1
Year 2
Year 3
390,000
410,000
420,000
300,000
Year 4
Total
1,520,000
The printer was sold at the end of Year 4 for $1,650.
Transcribed Image Text:Required
a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation.
Depreciation
Expense
Year 1
Year 2
Year 3
Year 4
Total accumulated depreciation
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