Question: Consider a $6500 piece of machinery, with a 5-year depreciable life and an estimated $1200 salvage value . The projected utilization of the machinery when

Consider a $6500 piece of machinery, with a 5-year depreciable life and an estimated $1200 salvage value. The projected utilization of the machinery when it was purchased, and its actual production to date are shown below.

Projected Actual Year Production (tons) Production (tons) 3500 3000 1 4000 5000 4500 Not 4 5000 Yet 5500 Known

Compute the machinery depreciation schedule by each of the following methods:

(a) Straight line.

(b) Sum-of-years' -digits.

(d) Unit of production (for first 2 years only).

(e) Modified accelerated cost recovery system.

Projected Actual Year Production (tons) Production (tons) 3500 3000 1 4000 5000 4500 Not 4 5000 Yet 5500 Known

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