Depreciation Methods} Graphic Design Inc. purchased a state-of-the-art laser engraving machine for ($ 94,500). Graphic determined that
Question:
Depreciation Methods}
Graphic Design Inc. purchased a state-of-the-art laser engraving machine for \(\$ 94,500\). Graphic determined that the system had an estimated life of 10 years (or 2,000,000 items engraved) and an estimated residual value of \(\$ 5,400\).
\section*{Required:}
1. Determine the amount of depreciation expense for the first and second years of the machine's life using the
(a) straight-line and
(b) double-declining-balance depreciation methods.
2. If the number of items engraved the first and second years was 220,000 and 180,000 , respectively, compute the amount of depreciation expense for the first and second years of the machine's life using the units-of-production depreciation method.
3. Compute the book values for all three depreciation methods as of the end of the first and second years of the system's life.
4. CONCEPTUAL CONNECTION What factors might management consider when selecting among depreciation methods?
\section*{OBJECTIVE (3 4) Problem
Step by Step Answer:
Cornerstones Of Financial Accounting
ISBN: 9780176707125
2nd Canadian Edition
Authors: Jay Rich, Jefferson Jones, Maryanne Mowen, Don Hansen, Donald Jones, Ralph Tassone