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.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 3CE: A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years....

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Question

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.

1. Straight-Line