Exact Photo Service purchased a new color printer at the beginning of Year 1 for $41,400. The printer is expected to have a four-year useful life and a $4,140 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 Year 4 Total 551,500 479,600 384, 200 386,800 1,802,100 The printer was sold at the end of Year 4 for $4,590. Required a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation. b. Compute the depreciation expense for each of the four years, using units-of-production depreciation. c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.
Exact Photo Service purchased a new color printer at the beginning of Year 1 for $41,400. The printer is expected to have a four-year useful life and a $4,140 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 Year 4 Total 551,500 479,600 384, 200 386,800 1,802,100 The printer was sold at the end of Year 4 for $4,590. Required a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation. b. Compute the depreciation expense for each of the four years, using units-of-production depreciation. c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.
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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b. Compute the depreciation expense for each of the four years,
c. Calculate the amount of gain or loss from the sale of the asset under each of the
Complete this question by entering your answers in the tabs below.
Required A Required
Year
Required B
Compute the depreciation
expense for each of the four years, using double-declining-b
intermediate calculations. Round final answers to the nearest whole dollar amount.)
Year
2
Year
3
Year
SA
$
Double-
Declining
Balance
Year 1
Year 2
Year 3
Year 4
20,700
$
$
2,588 x
Complete this question by entering your answer
10,350
$
$
Required A Required Bu Required C
$
X Answer is complete but not entirely corre
5,175
Compute the depreciation expense for each of the four years, using units-of-pro
three decimal places. Round other intermediate calculations and your final answ
Units-of-
Production
$
Required C
11,403 X
9,916 X
7,944 X
7,997 X
Transcribed Image Text:Exact Photo Service purchased a new color printer at the beginning of Year 1 for $41,400. The printer is expected to have a four-year
useful life and a $4,140 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
Year 4
Total
551,500
479,600
384, 200
386,800
1,802,100
The printer was sold at the end of Year 4 for $4,590.
Required
a. Compute the depreciation expense for each of the four years, using double-declining-balance depreciation.
b. Compute the depreciation expense for each of the four years, using units-of-production depreciation.
c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.
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