On January 1, 2014, Courier Inc. purchased new equipment that had a total cost (including shipping and installation) of $79,000. The equipment is expected to have a useful life of four years or produce a total of 119,000 units. At the end of its life, the equipment is expected to have a residual value of $4,400. The equipment is expected to produce 28,560 units in 2014; 30,940 units in 2015; 33,320 units in 2016; and 26,180 units in 2017. Courier Inc.'s fiscal year ends on December 31. In the table below, fill in the missing depreciation expense and accumulated depreciation amounts using the straight-line, double-declining-balance, and units-of-production methods. Do not round your intermediate calculation. When required, round your answers to the nearest dollar. Cost $79,000 Depreciation Expense Accumulated Depreciation Year Straight-line Method Double- Declining- Balance Method Unit-of- Production Method Straight-line Method Double- Declining- Balance Method Unit-of- Production Method 2014 $fill in the blank $39,500 $17,904 $18,650 $39,500 $17,904 2015 $18,650 $fill in the blank $19,396 $fill in the blank $59,250 $37,300 2016 $18,650 $9,875 $fill in the blank $55,950 $fill in the blank $58,188 2017 $18,650 $5,475 $16,412 $74,600 $74,600 $fill in the blank
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 1, 2014, Courier Inc. purchased new equipment that had a total cost (including shipping and installation) of $79,000. The equipment is expected to have a useful life of four years or produce a total of 119,000 units. At the end of its life, the equipment is expected to have a residual value of $4,400. The equipment is expected to produce 28,560 units in 2014; 30,940 units in 2015; 33,320 units in 2016; and 26,180 units in 2017. Courier Inc.'s fiscal year ends on December 31.
In the table below, fill in the missing
| Cost $79,000 |
Depreciation Expense |
Accumulated Depreciation |
||||
|---|---|---|---|---|---|---|
Year |
Straight-line Method |
Double- Declining- Balance Method |
Unit-of- Production Method |
Straight-line Method |
Double- Declining- Balance Method |
Unit-of- Production Method |
| 2014 | $fill in the blank | $39,500 | $17,904 | $18,650 | $39,500 | $17,904 |
| 2015 | $18,650 | $fill in the blank | $19,396 | $fill in the blank | $59,250 | $37,300 |
| 2016 | $18,650 | $9,875 | $fill in the blank | $55,950 | $fill in the blank | $58,188 |
| 2017 | $18,650 | $5,475 | $16,412 | $74,600 | $74,600 | $fill in the blank |
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