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.
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
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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