Question

A machine costing $216,600 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 494,000 units of product during its life. It actually produces the following units: 122.400 in 1st year, 122,500 in 2nd year, 120,500 in 3rd year, 138,600 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate--this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.) Required: Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Straight Line Units of Production DDB Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Straight-line depreciation. Straight-Line Depreciation Year Depreciation Expense 2 Total

Answer 1

rate positively .. let me know if you need any clarification..

Straight line depreciation			Computation of depreciable value
		i	Total cost		216600
		ii	Salvage value		19000
		iii=i-ii	Depreciable value		197600
		iv	Usefull life =		4
		v=iii/iv	Annual depreciation =		49400
			Depreciation for the year
	Year	Depreciation expenses
	1	49400
	2	49400
	3	49400
	4	49400
	Total	197600
Unit of production method
	Computation of depreciation expenses per unit
	Depreciation per unit = (Total cost - salvage value) / total production
	Total production =		494000
	Total cost	Salvage value	Total unit		Depreciation per mile
	216600	19000	494000		0.40
	Year	Depreciable units	Depreciable per unit	Depreciation expenses
	1	122400	0.40	48960
	2	122500		49000
	3	120500		48200
	4	138600		55440
	Total	504000		201600
Double declining method
	Depreciation rate = 2/4			50%
			Depreciation for the year
	year	Beginning of period book value	Depreciation rate		Depreciation expenses	Accumulated depreciation	Book value
	1	216600	50	%	108300	108300	108300
	2	108300	50	%	54150	162450	54150
	3	54150	50	%	27075	189525	27075
	4	27075			8,075	197600	19000
	Total				197,600