Computing Depreciation under Alternative Methods
Sterling Steel Inc. purchased a new stamping machine at the beginning of the year at a cost of $580,000. The estimated residual value was $60,000. Assume that the estimated useful life was five years, and the estimated productive life of the machine was 260,000 units. Actual annual production was as follows:
Year | Units |
1 | 73,000 |
7 | 62,000 |
3 | 30,000 |
4 | 53,000 |
5 | 42,000 |
Required:
1. Complete a separate depreciation schedule for each of the alternative methods. Round your answers to the nearest dollar.
a. Straight-line.
b. Units-of-production.
c. Double-declining-balance.
Method: ______________________ | ||||
Year | Computation | Depreciation Expense | Accumulated Depreciation | Net Book Value |
At acquisition |
|
|
|
|
1 |
|
|
|
|
2 |
|
|
|
|
etc. |
|
|
|
|
2. Assuming that the machine was used directly in the production of one of the products that the company manufactures and sells, what factors might management consider in selecting a preferable depreciation method in conformity with the matching principle?
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.