Double-declining-balance and units-of-production depreciation: gain or loss on disposal
Kate’s Photo Service purchased a new color printer at the beginning of 2011 for $28,000. The printer is expected to have a four-year useful life and a $2,000 salvage value. The expected print production is estimated at 1,300.000 pages. Actual print production for the four years was as follows:
2011 | 350,000 |
2012 | 370,000 |
2013 | 280,000 |
2014 | 320,000 |
Total | 1,320,000 |
The printer was sold at the end of 2014 for $1,500.
Required
a.Compute the depreciation expense for each of the four years, using double-declining-balance depreciation.
b.Compute the depreciation expense for each of the four years, using units-of-production depreciation.
c.Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods.
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