Depreciation Methods}

Muskoko Corporation purchased a copying machine for \(\$ 8,700\) on January 1, 2018. The machine's residual value was \(\$ 425\) and its estimated life was five years or \(2,000,000\) copies. Actual usage was 480,000 copies the first year and 400,000 the second year.

\section*{Required:}

1. Compute depreciation expense for 2018 and 2019 using the

(a) straight-line method,

(b) double-declining-balance method, and

(c) units-of-production method.

2. For each depreciation method, what is the book value of the machine at the end 2018 ? At the end of the 2019?

3. Assume that Muskoko uses the double-declining-balance method of depreciation. What is YOUDECIDE

\section*{OBJECTIVE 34}


OBJECTIVE 34 YOUDECIDE

\section*{OBJECTIVE 3 (4)} the effect on assets and income relative to if Muskoko had used the straight-line method of depreciation instead of the double-declining-balance method of depreciation?

\section*{Exercise