DEPRECIATION METHODS Graphic Design Inc. purchased a state-of-the-art laser engraving machine for $90,000. Parker determined that the
Question:
DEPRECIATION METHODS Graphic Design Inc. purchased a state-of-the-art laser engraving machine for $90,000.
Parker determined that the system had an expected life of 10 years (or 2,000,000 items engraved) and an expected residual value of $5,400.
Required:
. 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.
. If the number of items engraved the first and second years was 205,000 and 187,000 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.
. Compute the book values for all three depreciation methods as of the end of the first and second years of the system’s life.
Step by Step Answer:
Cornerstones Of Financial Accounting Current Trends Update
ISBN: 9781111527952
1st Edition
Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen