Question

Exercise 7-48 (Algorithmic) Depreciation Methods Berkshire Corporation purchased a copying machine for $9,800 on January 1, 2019. The machine's residual value was $1,175 and its expected life was 5 years or 2,000,000 copies. Actual usage was 480,000 copies in the first year and 442,000 in the second year Required: 1. Compute depreciation expense for 2019 and 2020 using the: a. Straight-line method Depreciation expense: $ 1,725 per year b. Double-declining-balance method Depreciation Expense 2019 $ 3,920 2020 $ 2,352 c. Units-of-production method. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar) Depreciation Expense $ 2,070 2019 2020 $ 1,992 X 2. For each depreciation method, what is the book value of the machine at the end of 20197 At the end of 20207 If required, round your answers to the nearest whole dollar 2010 2020 a. Straight-line method 8,075 6,350 b. Double-declining-balance method 5,880 $ 3,528 c. Units-of-production method 7,730 .738

Answer 1

Requirement 1. a. Straight-line Method Depreciation Expenses $1,725 ($9,800 - $1,175)/5 Depreciation: per vear a. Double-declinig-balance method Depreciation Expenses 2019 $3,920 2020 $2,352 {(1/5) *2} *$9,800 |(1/5) *2} * ($9,800 - $3,920) C. Unit-of-Production Method Depreciation Expenses 2019 $2,070 2020 $1,906 ($9,800 - $1,175) * 480,000 units / 2,000,000 units ($9,800 - $1,175) * 442,000 units / 2,00,0000 units

Requirement. 2 2019 2020 a. Straight-line Method $8,075 ($9,800 - $1,725) $5,880 ($9,800 - $3,920) $7,730 $6,350 ($8,075 - $1,725) $3,528 ($5,880 - $2,352) $5,824 a. Double-declinig-balance method C. Unit-of-Production Method ($9,800 - $2,070) ($7,730 - $1,906)