Question

A machine costing $210.400 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company's factory on January 1. The factory manager estimates the machine will produce 486,000 units of product during its life. It actually produces the following units: 121,700 in Year 1, 122,600 in Year 2, 120,600 in Year 3, 131,100 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate-this difference was not predicted.(The machine cannot 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

Answer 1

Straight Line
Date	Cost of asset	Depreciable cost	Useful life	Depreciation expenses	Accumulated Depreciation	Book value
Year 1	$2,10,400	$1,94,400	4 Years	$48,600	$48,600	$1,61,800
Year 2	$2,10,400	$1,94,400	4 Years	$48,600	$97,200	$1,13,200
Year 3	$2,10,400	$1,94,400	4 Years	$48,600	$1,45,800	$64,600
Year 4	$2,10,400	$1,94,400	4 Years	$48,600	$1,94,400	$16,000
Total				$1,94,400
Units of production
Date	Cost of asset	Depreciation per unit	No. of units	Depreciation expenses	Accumulated Depreciation	Book value
Year 1	$2,10,400	$0.39	121700	$47,699	$47,699	$1,62,701
Year 2	$2,10,400	$0.39	122600	$48,051	$95,750	$1,14,650
Year 3	$2,10,400	$0.39	120600	$47,267	$1,43,017	$67,383
Year 4	$2,10,400	$0.39	131100	$51,383	$1,94,400	$16,000
Total			496000	$1,94,400
Double Declining balance
Date	Cost of asset	Book Value	DDB Rate	Depreciation expenses	Accumulated Depreciation	Book value
Year 1	$2,10,400	$2,10,400	50.00%	$1,05,200	$1,05,200	$1,05,200
Year 2	$2,10,400	$1,05,200	50.00%	$52,600	$1,57,800	$52,600
Year 3	$2,10,400	$52,600	50.00%	$26,300	$1,84,100	$26,300
Year 4	$2,10,400	$26,300	50.00%	$10,300	$1,94,400	$16,000
Total				$1,94,400