Depreciation Methods On January 2, Alvarez Company purchased an electroplating machine to help manufacture a part for one of its key products. The machine cost $240,000 and was estimated to have a useful life of six years or 700,000 cuttings, after which it could be sold for $24,400. Required a. Calculate each year’s depreciation expense for the period 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 platings of 140,000; 180,000; 100,000; 110,000; 80,000; and 90,000.)   1. Straight-Line Year Depreciation Expense Year 1 $Answer Year 2 Answer Year 3 Answer Year 4 Answer Year 5 Answer Year 6 Answer   2. Double-declining balance Year Depreciation Expense Year 1 $Answer Year 2 Answer Year 3 Answer Year 4 Answer Year 5 Answer Year 6 Answer   3. Units of Production Year Depreciation Expense Year 1 $Answer Year 2 Answer Year 3 Answer Year 4 Answer Year 5 Answer Year 6 Answer   b. Assume that the machine was purchased on September 1. Calculate each year’s depreciation expense for the period under each of the following depreciation methods: 1. Straight-line. 2. Double-declining balance.

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Depreciation Methods

On January 2, Alvarez Company purchased an electroplating machine to help manufacture a part for one of its key products. The machine cost $240,000 and was estimated to have a useful life of six years or 700,000 cuttings, after which it could be sold for $24,400.

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a. Calculate each year’s depreciation expense for the period 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 platings of 140,000; 180,000; 100,000; 110,000; 80,000; and 90,000.)

 

1. Straight-Line


Year
Depreciation
Expense
Year 1 $Answer
Year 2 Answer
Year 3 Answer
Year 4 Answer
Year 5 Answer
Year 6 Answer

 

2. Double-declining balance


Year
Depreciation
Expense
Year 1 $Answer
Year 2 Answer
Year 3 Answer
Year 4 Answer
Year 5 Answer
Year 6 Answer

 

3. Units of Production


Year
Depreciation
Expense
Year 1 $Answer
Year 2 Answer
Year 3 Answer
Year 4 Answer
Year 5 Answer
Year 6 Answer

 

b. Assume that the machine was purchased on September 1. Calculate each year’s depreciation expense for the period under each of the following depreciation methods:

1. Straight-line.
2. Double-declining balance.

 

1. Straight-Line


Year
Depreciation
Expense
Year 1 $Answer
Year 2 Answer
Year 3 Answer
Year 4 Answer
Year 5 Answer
Year 6 Answer
Year 7 Answer

 

2. Double-declining balance


Year
Depreciation
Expense
Year 1 $Answer
Year 2 Answer
Year 3 Answer
Year 4 Answer
Year 5 Answer
Year 6 Answer
Year 7 Answer
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