Question

The following information applies to the questions displayed below.) Exact Photo Service purchased a new color printer at the beginning of 2018 for $38,500. The printer is expected to have a four-year useful life and a $1,510 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows: 2018 2019 2020 550,500 479,380 380,760 391,380 1,881,8ee 2021 Total The printer was sold at the end of 2021 for $1,740. Exercise 6-10 Part a Required a. Compute the depreciation expense for each of the four years, using double-declining balance depreciation (Do not round your Intermediate calculations. Round final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter "0" wherever required.) Double-Declining Balance 2018 2019 2020 2021 < Prev 3 4 5 of 8 !!! Next >

Answer 1

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Answers are highlighted in yellow: Solution: a) Double Decline-balance method: Year Opening Depreciation Carrying Amt Expense 2018 38500 19250 2019 19250 9625 2020 9625 4813 2021 4813 3273 Acc. Depre. 19250 28875 33688 36960 Carrying value Calculation 19250 (38500*50%) 9625 4813 1540 (plug, salvage value) b) Year Units-of-activity depreciation: Unit of Depreciation Production Expense 2018 550500 11292 2019 479300 9832 2020 380700 7809 2021 391300 8027 Acc. Depre. 11292 21124 Carrying value Calculation 27208 (38500-1540)/1801800*550500 17376 (38500-1540)/1801800*479300 9567 (38500-1540)/1801800*380700 1540 (38500-1540)/1801800*391300 28933 36960 Double decline balance Unit-of-production Amount 200 200 Effect Gain (1740-1540) Gain (1740-1540)