Question

Oct 2017 A machine costing 50.000 with a five year and salva value $2.000 The manager estimates the machine will produce 10.000 units of products during its useful . It actually produces the following units 300 units in Year 1, 2,000 units in Year 2, 3,000 units in Year 3, 2,700 in Year 4.1.200 Years and 800 in Year 6. Compute the Depreciation Expense for three different methods Straight line method Depreciation schedule What is the JEto record Depreciation Expense at Dec 31, 2017 Date ACCO Title What is the Je to record Depreciation Expense at Dec 31, 2018 Date Account Title Debt Credit Unit of Production Method Year Double Declining Method Depreciation Schedule

Answer 1

Straight Line
Date	Cost of asset	Depreciable cost	Useful life	Depreciation expenses	Accumulated Depreciation	Book value
Year 1-3 months	$30,000	$28,000	5 Years	$1,400	$1,400	$28,600
Year 2	$30,000	$28,000	5 Years	$5,600	$7,000	$23,000
Year 3	$30,000	$28,000	5 Years	$5,600	$12,600	$17,400
Year 4	$30,000	$28,000	5 Years	$5,600	$18,200	$11,800
Year 5	$30,000	$28,000	5 Years	$5,600	$23,800	$6,200
Year 6-9 months	$30,000	$28,000	5 Years	$4,200	$28,000	$2,000
Date	Account and explanation	Debit	Credit
Dec 31,2017	Depreciation expenses	$1,400
	Accumulated Depreciation-Machine		$1,400
Dec 31,2018	Depreciation expenses	$5,600
	Accumulated Depreciation-Machine		$5,600
Units of production
Date	Cost of asset	Depreciation per unit	No. of units	Depreciation expenses	Accumulated Depreciation	Book value
Year 1	$30,000	$2.80	300	$840	$840	$29,160
Year 2	$30,000	$2.80	2000	$5,600	$6,440	$23,560
Year 3	$30,000	$2.80	3000	$8,400	$14,840	$15,160
Year 4	$30,000	$2.80	2700	$7,560	$22,400	$7,600
Year 5	$30,000	$2.80	1200	$3,360	$25,760	$4,240
Year 6	$30,000	$2.80	800	$2,240	$28,000	$2,000
Double Declining balance
Date	Cost of asset	Book Value	DDB Rate	Depreciation expenses	Accumulated Depreciation	Book value
Year 1-3 months	$30,000	$30,000	40.00%	$3,000	$3,000	$27,000
Year 2	$30,000	$27,000	40.00%	$10,800	$13,800	$16,200
Year 3	$30,000	$16,200	40.00%	$6,480	$20,280	$9,720
Year 4	$30,000	$9,720	40.00%	$3,888	$24,168	$5,832
Year 5	$30,000	$5,832	40.00%	$2,333	$26,501	$3,499
Year 6-9 months	$30,000	$3,499	40.00%	$1,050	$27,551	$2,449