Question

Hup Sova Required information Exercise 6-10 Double-declining balance and units-of-production depreciation: gain or loss on disposal LO 6-3, 6-4 (The following information applies to the questions displayed below.) Exact Photo Service purchased a new color printer at the beginning of 2018 for $41,900. The printer is expected to have a four-year useful life and a $1,676 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows: 2018 2019 2020 2021 Total 547,000 477,700 381,800 394,400 1,800,900 The printer was sold at the end of 2021 for $1,826. < Prev 3 4 5 of 8 !!! Next > one X

Answer 1

Solution a:

Double Declining Balance Method
	Depreciation for the period			End of period
Date	Book Value	DDB Rate (1/4*2)	Depreciation Expense	Accumulated Depreciation	Book Value
31-Jan-18	41900	50%	20950	20950	20950
31-Jan-19	20950	50%	10475	31425	10475
31-Jan-20	10475	50%	5238	36663	5238
31-Jan-21	5238	50%	2619	39281	2619
Total			39281

Solution b:

Units of Production Method
Date	Depreciation per unit [($41900- $1676)/ 1500000]	Number of Units	Depreciation Expense	Accumulated Depreciation	Book Value
31-Jan-18	0.0270	547000	14769	14769	27131
31-Jan-19	0.0270	477700	12898	27667	14233.1
31-Jan-20	0.0270	381800	10309	37976	3924.5
31-Jan-21	0.0270	Balance	2249	40224	1676
Total			40224

Solution c:

Depreciation Method	Amount	Effect
Double declining balance ($1826-2619)	-743	Loss
Units of production (1826-1676)	200	Gain