Question

Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a cost of $800,000. The estimated residual value was $87,600. Assume that the estimated useful life was five years, and the estimated productive life of the machine was 274,000 units. Actual annu production was as follows Year Units 1 77,000 2 68,000 3 32,000 4 60,000 5 37,000 Required 1. Complete a separate depreciation schedule for each of the alternative methods. (Do not round your intermediate calculations.) a. Straight-line Net Depreciation Accumulated Year ExpenseDepreciation oolk Value At acquisition 4 b. Units-of-production Net ExpenseDepreciation ok Value Depreciation Accumulated Year At acquisition 4 c. Double-declining-balance Net Depreciation Accumulated Year ExpenseDepreciation ook Value At acquisition 4

Answer 1

Prepare depreciation schedule : Straight line depreciation

Year	Depreciation expense	Accumlated depreciation	Net book value
At acquisition			800000
1	142480	142480	657520
2	142480	284960	515040
3	142480	427440	372560
4	142480	569920	230080
5	142480	712400	87600

Prepare depreciation schedule : Unit of production

Year	Depreciation expense	Accumlated depreciation	Net book value
At acquisition			800000
1	200200	200200	599800
2	176800	377000	423000
3	83200	460200	339800
4	156000	616200	183800
5	96200	712400	87600

Prepare depreciation schedule : Double declining

Year	Depreciation expense	Accumlated depreciation	Net book value
At acquisition			800000
1	320000	320000	480000
2	192000	512000	288000
3	115200	627200	172800
4	69120	696320	103680
5	16080	712400	87600